Update on the CTA BOIR Injunction: What You Need to Know

Key Updates

On January 23, 2025, the U.S. Supreme Court granted the Department of Justice’s request to stay the nationwide injunction of the Corporate Transparency Act (CTA) and the Beneficial Ownership Information Reporting (BOIR) requirements issued by the federal judge in the case Texas Top Cop Shop, Inc. v. McHenry—formerly, Texas Top Cop Shop, Inc. v. Garland. The injunction is stayed pending a decision by the Fifth Circuit Court on the merits of the case (whether the CTA and BOIR is unconstitutional) or pending any further decision by the Supreme Court, if a petition for review is filed with the Supreme Court. This means that, under the Texas Top Cop Shop decision, companies are once again required to comply with the BOIR filing requirements.

However, despite the Supreme Court’s action in the Texas Top Cop Shop case, the Financial Crimes Enforcement Network (FinCEN), the agency tasked with administering the BOIR filing regime, is still NOT requiring companies to file BOIR reports as a result of a separate injunction order recently issued by a different federal judge in the case Smith v. U.S. Department of Treasury. Thus, as of today, January 24, 2025, companies are not required to file BOIR reports while the Smith order remains in force. Click here for the update from FinCEN.

What’s Next?

• Fifth Circuit Court Schedule: The Fifth Circuit is still set for an expedited schedule for considering the merits of the Texas Top Cop Shop case. Briefing from the parties is due by February 28, 2025, with oral arguments scheduled for March 25, 2025.

• Potential Petition for a Writ of Certiorari to the U.S. Supreme Court: The parties have 90 days from the entry of the Texas Top Cop Shop amended injunction order (entered December 5, 2024) to request review of the injunction order by the U.S. Supreme Court. If a timely request for such review (writ of certiorari) is filed and it is denied, the stay of the injunction would automatically terminate. If writ of certiorari is granted, the stay of the injunction would terminate upon the decision of the Supreme Court.

While the legal landscape remains fluid, we advise all business owners to remain vigilant and prepared to comply with the CTA and BOIR requirements if the injunction order is ultimately set aside, the courts determine the CTA and BOIR requirements are constitutional, or FinCEN decides to begin enforcing the CTA and BOIR reporting requirements under the Supreme Court’s Texas Top Cop Shop decision (stay of the nationwide injunction). Please don’t hesitate to reach out if you have any questions or need further assistance.

Stay Tuned for More Updates!

We will continue to monitor the situation and will keep you informed as new developments arise.