The United States Corporate Transparency Act (CTA), enacted in January 2021, aims to fight financial crimes by requiring US-based companies to report beneficial ownership information (BOI) to the Financial Crimes Enforcement Network (FinCEN). This report includes identifying information on UBOs: names, birth dates, addresses, and tax identification numbers.

The CTA applies to most companies formed or registered to do business in the US. Companies existing before 2024, were set to report BOI by 31 December 2024. However, before the set deadline, there were significant developments surrounding the law:

03 December 2024:

The US District Court for the Eastern District of Texas issued a nationwide preliminary injunction halting the enforcement of the CTA, beneficial ownership reporting requirements and related compliance deadlines.

Read: Texas Top Cop Shop, Inc., et al v. McHenry, et al

23 December 2024:

The US Court of Appeals for the Firth Circuit reversed the injunction. Companies were again required to submit BOI to the FinCEN by 13 January 2025.

26 December 2024

A US Fifth Circuit Court panel reinstated the nationwide preliminary injunction against the enforcement of the CTA. Companies were no longer required to submit BOI.

07 January 2024

A separate case prompted the issuance of a separate nationwide injunction of the CTA; see Smith et al v. United States Department of The Treasury et al, No. 6:2024cv00336 – Document 30 (E.D. Tex. 2025) :: Justia

23 January 2025                         

The US Supreme Court issued a stay on the injunction (in relation to the Texas Top Cop Shop Inc. case), mandating companies to submit their BOI to the FinCEN. No deadlines were set during this announcement. However, despite the Supreme Court ruling, the 07 January injunction effectively blocked the CTA enforcement.

As of 26 January 2025, the injunction is still in effect. The filing of BOI is voluntary, and non-compliant companies will not face any penalties or liability.

Bolder Group remains dedicated to keeping you informed. Our governance team in the US is closely monitoring the situation and will provide updates on any relevant developments.

For more information, contact our Corporate and Governance Officer, Alaiana Monteiro.

Bolder Group does not provide financial, tax or legal advice and the information contained herein is meant for general information purposes only. We strongly recommend that before acting on any of the information contained herein, readers should consult with their professional advisers. The Bolder Group accepts no liability for any errors or omissions in the information, or the consequences resulting from any action taken by a reader based on the information provided herein.

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