CTA Filing Requirements Remain Blocked
On January 23, 2025, the United States Supreme Court stepped into the fray regarding the ongoing litigation in Texas related to the Corporate Transparency Act’s (“CTA”) filing requirements for beneficial ownership information (“BOI”).
As discussed previously, the Texas litigation has involved a frenzy of Orders blocking, reinstating, and then again blocking enforcement of the CTA’s filing requirements. The Supreme Court’s action vacated the Texas court’s stay of the CTA’s filing requirements. However, a separate nationwide order issued by a different federal judge in Texas remains in place.
As a result, per FinCEN, reporting companies are not currently required to file BOI reports, despite the Supreme Court’s action.
At this point, filing is not a requirement, but reporting companies may voluntarily file BOI reports. It is unclear whether further action will be taken with respect to the existing nationwide injunction. If that injunction is vacated in a similar fashion, it is likely that FinCEN will grant only a small compliance window.
MacDonald Illig urges its clients to reach out if they have any questions regarding the CTA and legal status of the filing requirement. As detailed in a prior client alert, failure to timely file a BOI report can result in penalties of $500 per day, with increased penalties for willful violations.
We will continue to monitor the ongoing litigation and provide updates as they occur. In the meantime, we are urging our client to collect your information and prepare your filing in the event the current nationwide injunction is similarly invalidated. If overturned, reporting companies will have to act quickly to avoid compliance issues.
We will continue to update you with any new developments. Please reach out to a MacDonald Illig attorney if you have any questions at 814-870-7600.
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