FinCEN Issues Statement regarding Nationwide Preliminary Injunction of the CTA

On December 3, 2024, in Texas Top Cop Shop, Inc., et al. v. Garland, et al., the United States District Court for the Eastern District of Texas granted a nationwide preliminary injunction that stayed the enforcement of the Corporate Transparency Act (CTA) and the CTA’s reporting rules. On December 5, 2024, the government filed a Notice of Appeal to the Fifth Circuit Court of Appeals of the District Court’s opinion and order. The U.S. Financial Crimes Enforcement Network (FinCEN), which is the bureau of the United States Treasury that is responsible for administration of the CTA, recently issued a statement stating that “[i]n light of a recent federal court order, reporting companies are not currently required to file beneficial ownership information with FinCEN and are not subject to liability if they fail to do so while the order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports.”

Given FinCEN’s statement, we continue to suggest that reporting companies closely monitor this matter for ongoing developments and either (i) file their Beneficial Ownership Interest (BOI) Reports by the deadline that would have applied prior to the Texas Top Cop Shop ruling, as it is possible that the injunction may be lifted, or (ii) prepare and gather all necessary information and documentation required to file their BOI Reports with sufficient lead time so that they are prepared to file if the injunction is lifted.   Reporting entities should remain in contact with their CTA advisors as they feel is necessary so as to understand what changes, if any, are required by ongoing developments in this litigation.

To read our most recent Client Alert regarding the District Court’s order and our suggested next steps, CLICK HERE.

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