Alert: Ongoing Litigation – Texas Top Cop Shop, Inc., et al. v. McHenry, et al., No. 4:24-cv-00478 (E.D. Tex.) & Voluntary Submissions [Updated January 24, 2025]; In 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.
It’s been a legal rollercoaster ride for the Corporate Transparency Act (CTA). Heading into December, a majority of business owners and operators in the U.S. were responsible for filing an initial beneficial ownership information (BOI) report with the Financial Crimes and Enforcement Network (FinCEN) pursuant to the CTA by December 31, 2024. 
However several recent events have impacted the legal status and enforceability of the anti-money laundering statute:
- December 3, 2024 – a federal district court issued a nationwide preliminary injunction preventing enforcement of the Corporate Transparency Act (CTA) due to concerns over the law’s constitutionality.
- December 23, 2024 – an appellate court panel stayed or otherwise paused the lower court’s injunction, finding that the government made a “strong showing that it is likely to succeed on the merits in defending the CTA’s constitutionality.” The panel’s order had the effect of reinstating the CTA’s reporting requirements, and FinCEN extended the filing deadline to January 13, 2025 for most “reporting companies” in response.
- December 26, 2024 – the Fifth circuit vacated the stay imposed by the appellate panel in light of an expedited ruling expected on the merits of the preliminary injunction. As a result of this ruling, the lower court’s nationwide injunction against enforcement of the CTA remained in effect, and FinCEN updated its website to indicate that “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.”
- January 23, 2025 – the Supreme Court granted the government’s motion to stay a nationwide injunction issued by a federal judge in Texas (Texas Top Cop Shop, Inc. v. McHenry—formerly, Texas Top Cop Shop v. Garland). As a separate nationwide order issued by a different federal judge in Texas (Smith v. U.S. Department of the Treasury) still remains in place, reporting companies are not currently required to file beneficial ownership information with FinCEN despite the Supreme Court’s action in Texas Top Cop Shop. Reporting companies also are not subject to liability if they fail to file this information while the Smith order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports.
If your business has already filed its BOI report, there is nothing more you need to do at this time.
If your business has not filed its initial BOI report, you are not currently required to do so; however, you may be required to file on short notice depending on the outcome of the impending Fifth Circuit decision (and likely appeal to the Supreme Court). Our recommendation is to gather all documents and information necessary to submit your BOI reports on short notice in the event it becomes necessary to do so. Many reporting companies are opting to file voluntary BOI reports to avoid the headaches and uncertainty caused by recent events.
Ready to file your BOI report? FinCEN has published a tutorial video to show beneficial owners how to do so. Check it out on YouTube here.
Have questions? Please check in with your attorney or a member of FLB’s Corporate, Business & Banking Team to help you navigate the CTA rules.
