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SMALL BUSINESS: CTA BENEFICIAL OWNERSHIP REPORTING STILL UNSETTLED

By Pamela J. Bethel

On December 26, 2024, the United States Court of Appeals for the Fifth Circuit restored the nationwide preliminary injunction that had been issued by the U.S. District Court for the Eastern District of Texas in Texas Top Cop Shop, Inc. v. Garland.  The injunction stopped the federal government from enforcing the Corporate Transparency Act (CTA) and thereby put on hold reporting companies’ obligation to comply with the Acts’s beneficial ownership reporting requirements. The government subsequently appealed this decision to the Supreme Court requesting that the Court stay the injunction, and on January 23, 2025, the Supreme Court lifted the injunction in Top Cop thereby restoring the government’s right to enforce the CTA to include the beneficial ownership reporting requirements.

However, on January 7, 2025, in a different lawsuit challenging the constitutionality of the CTA, Smith v. U.S. Department of the Treasury, another nationwide injunction stopped the enforcement of the CTA. Enforcement of the CTA remains enjoined, and thus unless and until there is an order by the Supreme Court in the Smith case overturning that injunction companies do not have to comply.  It remains to be seen whether the Justice Department under the Trump Administration will seek a stay of the Smith injunction, particularly since legislation has been proposed in Congress to repeal the CTA.

FinCEN is accepting filings. The website [] opens with a banner that advises that “[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. More information is available at https://www.fincen.gov/boi.”

The bottom line is that for the near term, reporting companies are not required to file the beneficial ownership reports. However, any company that chooses not to file (and not to file updates) during the injunctions must be vigilant in keeping abreast of developments about the CTA from the judicial, legislative, or executive branches.

This blog is for educational purposes only. Nothing posted on this blog constitutes or substitutes for legal advice, which can only be obtained from a personal consultation with a qualified attorney. Using this blog does not create an attorney-client relationship between you and the authors and/or O’Riordan Bethel Law Firm, LLP. Although the authors strive to present accurate information, the information provided on this blog is not guaranteed to be complete, correct or up-to-date. The views expressed on this blog are solely those of the authors and do not necessarily reflect the views of O’Riordan Bethel Law Firm, LLP.