FinCEN Reacts to the Nationwide Injunction on the Corporate Transparency Act

In response to the decision in Texas Top Cop Shop, Inc. v. Garland, FinCEN issued a press release reacting to the nationwide injunction suspending enforcement of the Corporate Transparency Act (CTA). In the press release, FinCEN announced that it filed a notice of appeal on December 5, 2024. In addition, the press release tersely observed that "reporting companies are not currently required to file their beneficial ownership information with FinCEN and will not be subject to liability if they fail to do so while the preliminary injunction remains in effect" (emphasis added). In the meantime, FinCEN remains open for business, and "reporting companies may continue to voluntarily submit beneficial ownership information reports."

As the bolded language above indicates, FinCEN appears deliberately vague about what happens if FinCEN is successful in lifting the preliminary injunction. Is a reporting company still bound to the January 1 deadline, even if it chose to save time and money while waiting for the judicial process to run its course? Or will FinCEN recognize the financial and practical difficulties created by the preliminary injunction and allow a reasonable grace period? As the days and weeks roll on towards the January 1 deadline without a resolution, we hope that FinCEN will issue more definitive guidance about this period of uncertainty.

In light of the limited guidance in FinCEN’s press release, the CTA compliance considerations discussed in our last CTA alert continue to apply. 

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If you have any questions about this latest CTA development or need help choosing the right compliance strategy in this highly uncertain and fluid legal environment, please contact your Herrick attorney or any member of Herrick's CTA team through our Corporate Transparency Act Resource Center.

Mark A. Limardo at + 1 212 592-1494 or [email protected]
Daniel A. Etna at + 1 212 592-1557 or [email protected]
Leah Kelman at + 1 973 274-2004 or [email protected]
Ellen L. Shapiro at + 1 212 592-1533 or [email protected]
Fred R. Green at + 1 212 592-5910 or [email protected]
Louis Tuchman at + 1 212 592-1490 or [email protected]
Theresa Fortin Balducci at + 1 212 592-1481 or [email protected]

© 2024 Herrick, Feinstein LLP. This alert is provided by Herrick, Feinstein LLP to keep its clients and other interested parties informed of current legal developments that may affect or otherwise be of interest to them. The information is not intended as legal advice or legal opinion and should not be construed as such.