As a business law attorney representing numerous companies across industries, we closely monitor the United States Supreme Court’s recent decision regarding the Corporate Transparency Act (CTA). The Court’s ruling has significant implications for businesses of all sizes that have yet to comply with this critical reporting requirement.
In a highly anticipated decision released on January 23, 2025, the Supreme Court granted a stay on the nationwide injunction against the CTA, reinstating the law’s enforceability. This action stems from case No. 4:24–cv–478, originating in the United States District Court for the Eastern District of Texas. As a result, all business entities subject to the CTA—including corporations, LLCs, and many other legal structures—must now ensure compliance or risk facing serious legal and financial consequences.
The stay, granted via an application presented to Justice Samuel Alito (24A653), will remain effective while the case undergoes review by the United States Court of Appeals for the Fifth Circuit and potentially the Supreme Court if a petition for certiorari is filed.
What This Means for Businesses
The CTA’s enforcement provisions require businesses to report beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN). The filing deadline for entities formed before January 1, 2024, has already passed, placing non-compliant entities in immediate legal jeopardy. While we anticipate FinCEN may offer a brief extension due to the judicial developments, businesses should not count on significant relief, given that prior extensions have been limited.
Non-compliance carries severe penalties, including substantial fines and potential criminal liability. Given the millions of unfiled beneficial ownership reports, the compliance environment is becoming increasingly challenging for businesses already grappling with tight operational deadlines.
Next Steps for Businesses
- Prepare for Potential Deadline Relief: While we anticipate FinCEN may announce a short extension, businesses must act quickly to avoid non-compliance. Any additional time provided will likely be minimal. The last extension was only 13 days.
- Monitor the Fifth Circuit Appeal: Oral arguments are scheduled for March 25, and the Fifth Circuit’s ruling will address the constitutionality of the CTA. This decision could ultimately escalate to the U.S. Supreme Court, adding further uncertainty to compliance timelines.
- Take Immediate Compliance Action: Businesses that have not yet submitted their beneficial ownership reports should act now to avoid fines and enforcement actions. The CTA is clear in its intent to increase transparency, and failure to comply could lead to significant legal and financial exposure.
How We Can Help
As a trusted legal advisor to hundreds of businesses nationwide, we understand the challenges the CTA presents, particularly for those with complex ownership structures or high volumes of entities requiring reporting. Our firm offers tailored compliance strategies to ensure that your businesses, big or small, will meet your obligations under the CTA.
From guidance on the reporting process, or for bulk uploads and streamlined reporting, we are here to minimize disruption and protect your business interests.
If you have questions about the CTA or need immediate assistance with compliance, please do not hesitate to contact our Firm. We are committed to helping you navigate these challenging times and safeguard your business against the risks of non-compliance.