On January 23, 2025, the U.S. Supreme Court granted the government’s motion to stay a nationwide preliminary injunction issued by a federal district court judge in Texas in the case of Texas Top Cop Shop, Inc. v. McHenry (formerly, Texas Top Cop Shop, Inc. v. Garland). The preliminary injunction prevented the Financial Crimes Enforcement Network (FinCEN) from enforcing the Corporate Transparency Act (CTA) and its requirement that non-exempt businesses report their beneficial ownership information (BOI) to FinCEN. The stay of this preliminary injunction will remain in place pending the decision of the Fifth Circuit Court of Appeals on the constitutionality of the CTA, and subsequent appeal to the U.S. Supreme Court, if accepted.
Despite the U.S. Supreme Court’s decision in Texas Top Cop Shop, FinCEN’s requirements are currently on hold due to a separate injunction issued by another federal district court judge in Texas in the case of Smith v. U.S. Department of the Treasury. This stay applies nationwide and the government has not appealed it. That appeal, if filed, would go to the Fifth Circuit as well.
As a result, reporting companies are not currently obligated to file BOI reports with FinCEN. FinCEN confirmed in a publication on its website that despite the Supreme Court ruling staying the nationwide preliminary injunction issued in Texas Top Cop Shop, reporting companies are not subject to liability if they fail to file BOI reports while the Smith order remains in force. However, reporting companies may continue to voluntarily submit BOI reports.
Given the continued uncertainty regarding when and if the CTA filing deadline will be reinstated, we recommend that non-exempt companies collect all required information and either file BOI reports voluntarily or be prepared to file on short notice.
For Golenbock’s previous alerts on CTA developments, please refer to them here:
Corporate Transparency Act – Fifth Circuit Reinstates Nationwide Ban (December 27, 2024)
Corporate Transparency Act Revived: Reporting Companies Have Until January 13, 2025, to Submit Initial BOI Reports (December 24, 2024)
Corporate Transparency Act (CTA) Blocked by Federal Court (December 5, 2024)
Corporate Transparency Act: Rules Requiring Privately Held Companies to Report Beneficial Ownership to the U.S. Government (May 10, 2024)
If you have any questions or need further information, please reach out to your contact at Golenbock or one of the following individuals on the Golenbock CTA FinCEN Compliance Committee:
Contacts:
Barry A. Cassell
bcassell@golenbock.com
(212) 907-7337
Jacob L. Chase
jchase@golenbock.com
(212) 907-7362
Sarah E. Kaehler
skaehler@golenbock.com
(212) 907-5680
Maureen R. Monaghan
mmonaghan@golenbock.com
(212) 907-7335
May Shim
mshim@golenbock.com
(212) 622-7161
Golenbock Eiseman Assor Bell & Peskoe LLP
Golenbock Eiseman Assor Bell & Peskoe LLP is a Manhattan-based business law firm with a broad-based practice that offers corporate, complex litigation, labor & employment, real estate, reorganization, intellectual property, tax, and trust & estate expertise. The firm provides high value, sophisticated counsel and representation for its domestic and international clients while maintaining a hands-on, personalized approach to all matters.
The firm represents entrepreneurial, portfolio, and institutional clients, ranging from start-ups to Fortune 500 companies, with a specific focus on the mid-market segment. Among our clients are private corporations, public companies, private equity firms, venture capital firms, individual investors, and entrepreneurs.
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