Corporate Transparency Act: Part I

Update December 19th, 2024 On December 3, 2024, the U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction in Texas Top Cop Shop, Inc., et al. v. Garland, enjoining the federal government from enforcing the Corporate Transparency Act (CTA) and its reporting deadlines. On December 13, 2024, the Department of Justice (DOJ) filed an Emergency Motion for Stay Pending Appeal in the Fifth Circuit requesting an expedited briefing schedule and a ruling “as soon as possible, but in any event no later than December 27, 2024, to ensure that regulated entities can be made aware of their obligation to comply before January 1, 2025.” Reporting companies should continue monitoring developments in the coming days in case the January 1, 2025 deadline for filing is reinstated. An Introductory Overview Congress passed the Corporate Transparency Act (the “CTA”) in 2020 as part of its initiative to crack down on illicit activities, such as money laundering, commonly associated with shell companies. Under the CTA, many entities formed or registered to do business in the United States will be required to report various information concerning beneficial ownership of/decision-makers for, a given company. The Financial Crimes Enforcement Network (“FinCEN”), under the direction of the United States Department of the Treasury, has been tasked…