US Corporate Transparency Act: Status Update
As we continue to provide updates on the latest developments regarding the US Corporate Transparency Act (“CTA”), since our last communication of 18 December 2024, a number of significant events have taken place which may impact your compliance obligations under the legislation.
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Timeline of Events
3 December 2024: The US District Court for the Eastern District of Texas issued a nationwide injunction on the CTA in connection with the case Texas Top Cop Shop, Inc. vs Garland.
5 December 2024: The Department of Justice, on behalf of the Department of the Treasury, filed a Notice of Appeal and issued a statement which said: “In light of a recent federal court order, reporting companies are not currently required to file beneficial ownership information with the Financial Crimes Enforcement Network (“FinCEN”) and are not subject to liability if they fail to do so while the order remains in force.”
23 December 2024: The Fifth Circuit Court of Appeals granted a stay of the district court’s preliminary injunction enjoining the CTA, requiring reporting companies to once again file beneficial ownership information with FinCEN.
23 December 2024: The Department of the Treasury extended the CTA reporting deadlines, in recognition that reporting companies may need additional time to file.
26 December 2024: The Fifth Circuit merits panel reinstated the nationwide injunction blocking enforcement of the CTA in order to preserve the constitutional status quo while the merits panel considers the parties’ arguments.
26 December 2024: FinCEN issued a statement which said: “In light of a recent federal court order, reporting companies are not currently required to file beneficial ownership information with FinCEN and are not subject to liability if they fail to do so while the order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports.”
25 March 2025: The Fifth Circuit Court of Appeals will hear oral arguments.
CTA: Current Status
At the time of writing, our understanding is that this ruling effectively suspends the enforcement of the CTA and its associated requirements pending further order of the court. The Court Order can be accessed here, and we encourage consultation with US legal counsel to understand the potential implications and to determine whether any action is required regarding your US entities in light of these developments.
The current situation remains dynamic and, based on our discussions, may evolve as this case progresses through the courts. We will continue to monitor developments and further updates will be issued in due course.
If you have any questions or require additional information about the CTA, please reach out to the authors of this article or your usual Maples Group contact.
For legal and regulatory disclosures, please visit maples.com/legal-notices.