Posts Tagged ‘Corporate Transparency Act’

The U.S. District Court for the Eastern District of Texas in Smith et al. v. U.S. Department of Treasury, et al., 6:24-cv-0036 (E.D. Tex), decided that the beneficial ownership information (“BOI”) reporting requirements under the Corporate Transparency Act (“CTA”) are back in effect. On January 24, 2025, we reported in our article “Enforcement Of The Corporate Transparency Act Still On Hold” that the CTA was on hold due to a nationwide injunction issued by Judge Kernodle of the Eastern District of Texas, despite the Supreme Court ruling on January 23, 2025. On February 5, 2025, the U.S. Department of Justice… read more »

Recent activity regarding the Corporate Transparency Act has resulted in no change in its enforcement. The United States Supreme Court issued a decision on January 23, 2025, lifting a nationwide stay on the enforcement of the Corporate Transparency Act. This decision comes after a roller-coaster of events in December over the scope of the stay issued in Texas Top Cop Shop, Inc. v. McHenry. Regardless of the Supreme Court’s decision, the enforcement of the Corporate Transparency Act is still being halted. Currently, reporting companies are not required to file their Beneficial Ownership Information but may voluntarily report. Summary of Events… read more »

On December 3, 2024, the Eastern District of Texas Federal Court issued a nationwide preliminary injunction against the Corporate Transparency Act (CTA) in the case of Texas Top Cop Shop v. Garland et al. This decision effectively suspends the enforcement of the CTA, which had mandated companies to report beneficial ownership information to FinCEN. Judge Mazzant delivered a scathing critique of the CTA, asserting that it likely exceeds Congressional authority and infringes upon state jurisdiction over corporate regulation. The court highlighted the substantial financial burden on businesses, with compliance costs estimated to surpass $22 billion in the initial year alone…. read more »

This is an update to our January 16, 2024 article titled “The Corporate Transparency Act and Beneficial Ownership Information Reporting”. At the beginning of this year, the Corporate Transparency Act (“CTA”) became effective. The CTA is intended to aid law enforcement in combating illicit activity, such as money laundering and terrorist financing, conducted through anonymous shell companies. It does so by mandating certain entities, primarily small or medium size businesses, to report “beneficial owner” information to the Financial Crimes and Enforcement Network (“FinCEN”). The CTA authorizes FinCEN, a Bureau of the US Treasurer Department, to collect, protect and disclose this information… read more »