The back and forth on the obligation of companies (corporation and limited liability companies) to report, pursuant to the Corporate Transplant Act (CTA), their beneficial owner information to Financial Crimes Enforcement Network (FinCEN) continues. On January 23, 2025, in the Texas Top Cop Shop, Inc. et al., v. McHenry, et al., the United States Supreme Court lifted the order that had stayed the obligation to report the information and sent the case back to the Fifth Circuit Court of Appeals for its further consideration.
However, the saga has become even more complicated because on January 7, 2025, in another case, Smith, et al. v. U.S. Department of the Treasury, et al. another Texas Federal District Court had issued an order enjoining FinCEN from enforcing the CTA.
Therefore, for now, there is no mandatory reporting requirement. We believe that the new administration will continue to litigate these cases all the to the United States Supreme Court to lift the injunctions and enforce the CTA which was passed in the Congress with bipartisan support from both parties.
For now, companies can voluntarily report the information but they are not obligated to do so. We will keep you apprised of developments.