The U.S. Supreme Court has stayed the nationwide preliminary injunction enjoining the federal government from enforcing the Corporate Transparency Act (“CTA”) that was first issued by a lower court in the case Texas Top Cop Shop, Inc., et al. v. Garland.  However, there is another preliminary injunction against the CTA in place, issued by another court in Smith et al. v. U.S. Department of the Treasury.  The Department of Treasury’s Financial Crimes Enforcement Network (“FinCEN”) has issued a statement interpreting this second preliminary injunction to apply nationwide. 

Accordingly, under this second injunction and FinCEN’s latest statement, companies are currently still not required to make any filings under the CTA.  

Update on Injunctions and Next Steps

On January 23, 2025, the U.S. Supreme Court granted the government’s request to stay the nationwide injunction against the CTA in Texas Top Cop Shop, Inc., et al. v. Garland.  This stay will remain in place while the Fifth Circuit decides on the government’s appeal in the case.  Oral arguments for the appeal are scheduled to begin March 25. 

However, a second preliminary injunction was issued by a court in Smith et al. v. U.S. Department of the Treasury on January 7, 2025.  While this second injunction prohibits the federal government from enforcing the CTA only against the parties in the case, rather than a nationwide injunction, the court also issued a stay against the effective date of the CTA’s reporting requirements nationwide. 

FinCEN issued a statement on January 24, 2025 interpreting the Smith et al. v. U.S. Department of the Treasury injunction to apply nationwide, and stating that reporting companies are therefore not currently required to file beneficial ownership information under the CTA. 

Accordingly, due to this second nationwide injunction and FinCEN’s statement, companies that would be required to make filings under the CTA are currently not required to do so, but may do so voluntarily.  We recommend continuing to collect information and preparing to submit the applicable reports should the second injunction be lifted and those filings become necessary.  Casner & Edwards will continue to monitor developments and provide updates. 

Background Information

The CTA is a new federal law that took effect on January 1, 2024.  It was enacted to combat money laundering, and under the CTA, all companies that are “reporting companies” must file certain beneficial ownership reports with the Department of Treasury’s Financial Crimes Enforcement Network.  Information on the CTA and its requirements and exemptions can be found in our previous client alerts of January 31, 2024 and October 15, 2024.  Additional information on the Texas Top Cop Shop, Inc., et al. v. Garland nationwide injunction can be found in our previous client alerts of December 10, 2024, December 24, 2024 and January 9, 2025.

Questions If you have any questions, please contact Casner & Edwards attorneys Peter Dunn, Michael Zullas, Steven Ayr, or Drew Douglas-Steele