Hurry Up and Wait – A CTA Story
What happened?
On January 23, 2025, the Supreme Court of the United States (the “Supreme Court”) issued a stay of the Preliminary Injunction of the Corporate Transparency Act (“CTA”) that was originally issued on December 5, 2024 (the “First Injunction”), by the District Court for the Eastern District of Texas (the “Supreme Court’s Stay”).
Separately, on January 7, 2025, another nationwide order was issued by a different federal judge in the Eastern District of Texas blocking the enforcement of the implementing regulations for the CTA (the “Second Injunction”). The federal government has not appealed this Second Injunction as of January 28th.
What does this mean?
Because of the Supreme Court’s Stay, no further update will be expected with respect to the First Injunction until after March 25, 2025, when oral arguments are scheduled to be heard before the Fifth Circuit. However, court action with respect to the Second Injunction could require updates before that time.
Because of the Second Injunction, FinCEN has announced that it will continue to accept voluntary submissions but will not seek to enforce the CTA or the related regulations.
What now?
Given the most recent developments in this case and the rapid pace of changes coming from Washington D.C., the cautious approach is to prepare to comply with the CTA by identifying beneficial owners and collecting necessary information. For those entities that wish to voluntarily comply before a final decision is reached, McGrath North is here to provide any assistance you may require.
What is next?
McGrath North will continue to monitor this fluid situation and provide updates as necessary. If you have any questions or if you need any assistance with CTA compliance, please don’t hesitate to contact your McGrath North attorney.
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