As you may know, we have posted numerous updates on the pending litigation surrounding the Federal Corporate Transparency Act (“CTA”) and enforcement of the CTA by the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”).
On February 5, 2025, the Department of Justice on behalf of the Department of the Treasury filed an appeal of a federal district court’s January 7th decision granting a nationwide preliminary injunction of the CTA in Samantha Smith et al. v. United States Department of the Treasury et al. (EDTX 6:24-cv-336). Additionally, the Department of Justice filed a motion with the federal district court to stay the January 7th decision, while the appeal is pending to the Fifth Circuit.
In its motion for a stay, Defendant cited the recent United States Supreme Court decision to lift another federal district court’s nationwide preliminary injunction in Texas Top Cop Shop, Inc. et al. v. Merrick Garland, Attorney General of the United States, et al. (EDTX 4:24-cv-478). Furthermore, the motion clarified that if the nationwide preliminary injunction is lifted, then FinCEN will extend the BOI report filing deadline for 30 days and “assess whether it is appropriate to modify the CTA’s reporting requirements to alleviate the burden on low-risk entities while prioritizing enforcement to address the most significant risks to U.S. national security.”
As of February 10, 2025, FinCEN has issued an alert on its website stating that it will be accepting voluntary submissions while the nationwide preliminary injunction is in effect.
Ultimately, the constitutionality of the CTA will be decided. We will provide further updates on these cases when available.
These federal litigation cases do not affect any similar state corporate transparency laws. New York’s LLC Transparency Act (the “NY Act”) requires the disclosure of beneficial ownership information to the New York Department of State by limited liability companies formed under the laws of the state of New York and foreign limited liability companies authorized to do business in the state of New York. The NY Act is largely based on the CTA and currently is set to go into effect on January 1, 2026.
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For further information or guidance on revising your policies, procedures, and corporate governance agreements, please contact David Paseltiner or Rose Egan. You can follow our blog for more information as it becomes available.