Corporate Transparency Act (CTA) Reinstated: Key Updates

On Monday, December 23, 2024, the Fifth Circuit Court of Appeals reinstated the Corporate Transparency Act (CTA), lifting a previous nationwide preliminary injunction. This decision, in the case of Texas Top Cop Shop, Inc. v. Garland, reinstates the compliance deadline for reporting companies.

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Key Points

• Immediate Effect: The CTA’s reporting obligations are now enforceable.
• Extended Deadline: FinCEN has extended the filing deadline to January 13, 2025, for companies created before 2024.
• Reporting Requirements: Corporations and LLCs must report beneficial ownership information to FinCEN to combat money laundering and financial crimes.

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Ongoing Legal Developments

• Challengers may seek further review from the Fifth Circuit or the U.S. Supreme Court.
• Other federal courts are also reviewing challenges to the CTA.
• FinCEN has not yet released new guidance following the ruling.

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Background

The CTA aims to prevent illicit financial activities by increasing transparency in corporate ownership. However, the law has faced numerous legal challenges, leading to varied outcomes in different courts.

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Disclaimer: This advisory provides a brief update on the CTA’s reporting requirements and recent litigation. It is not intended to provide legal, compliance, or other advice. For more information, visit the Financial Crimes Enforcement Network (FinCEN).