U.S. Supreme Court Allows Corporate Transparency Act Enforcement
January 28, 2025
The U.S. Supreme Court on Jan. 23 granted the government’s request to stay the nationwide injunction on the enforcement of the Corporate Transparency Act (CTA), which requires millions of businesses to file beneficial ownership information (BOI).
Following the ruling, however, FinCEN on Jan. 24 issued guidance that reporting companies are not currently required to file BOI with FinCEN despite the ruling in the Texas Top Cop Shop case.
“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,” FinCEN said.
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.
The rule requires many companies to report information to the U.S. government about the individuals who ultimately own or control the company. ALTA held a webinar last year that detailed which companies would need to comply with the reporting rule.
Under the law, most incorporated business entities that existed before 2024 must file their ownership and control information with FinCEN. The agency estimates 32.6 million US businesses will need to disclose beneficial ownership information or face penalties, as will an estimated 5 million new businesses incorporated annually.
While the law's future remains uncertain, ALTA continues to work with FinCEN and lawmakers on Capitol Hill to address concerns with the Residential Real Estate Reporting Rule that was finalized as part of the Corporate Transparency Act.
Contact ALTA at 202-296-3671 or [email protected].