The CTA Remains On Hold - Uncertainty Lingers

As the ongoing battles of the CTA continue into the New Year, millions of reporting companies across the nation are still facing extreme uncertainty regarding the future of the Beneficial Ownership Reporting (BOI) requirement introduced by the Corporate Transparency Act (CTA) and FinCEN.

Initially, reporting companies were required to file their Beneficial Ownership Information reports with FinCEN by January 1, 2025. However, on December 3, 2024, a Federal District Court in Texas issued a nationwide injunction in the case of Texas Top Cop Shop, Inc. vs. Garland, temporarily halting the filing requirement and its impending January 1st deadline. This ruling prevented FinCEN from enforcing the January 1st deadline and suspended the obligation for businesses to disclose their beneficial ownership information to the government until further court orders.

On Monday, December 23, 2024, a panel of judges from the Fifth Circuit Court of Appeals had finally granted a motion to lift the injunction, pushing the BOI reporting deadline to January 13, 2025. But just days later, on Thursday, December 26, 2024, another panel of judges from the same court reversed the decision, reimposing the suspension of the BOI reporting requirement.

On December 31st, 2024, FinCEN through the Department of Justice (DOJ) filed its Application for a Stay of Injunction Issued by the United States District Court for the Eastern District of Texas with the U. S. Supreme Court to stay the District Court’s nationwide injunction blocking the enforcement of BOI reporting. Therefore, the U.S. Supreme Court would decide whether the injunction should remain.

On January 7th, 2025, a separate injunction was imposed on the CTA by a different federal judge in the Eastern District of Texas in the case of Samantha Smith and Robert Means vs. U.S. Department of the Treasury, otherwise known as the “Smith Case” which was enacted based on other facts and arguments apart from the Top Shop Case.

In most recent news, as of January 23rd, 2025, the Supreme court suspended the injunction enforced by the Texas Federal District Court in the case of “Texas Top Cop”. Therefore, nothing has changed with regards to the filing requirement since the injunction in the “Smith Case” still stands. As a result, reporting companies may still voluntarily submit their beneficial ownership reports to FinCEN, though they are not legally required to do so until further notice.

It is essential to stay informed about the future of the Beneficial Ownership Information (BOI) reporting requirement, as ongoing court decisions could significantly impact compliance deadlines and obligations. By staying updated on these developments, reporting companies can proactively respond to any shifts in the law and ensure continued compliance with government regulations.

GRIFFING & COMPANY, P.C.

(281) 491-8866 Fax (281) 491-8998

info@griffing.com

www.griffing.com