Corporate Transparency Act (CTA) Compliance Update
The Corporate Transparency Act (CTA) remains a rapidly evolving regulatory issue. Recent legal developments, including a U.S. Supreme Court decision and ongoing litigation, have created uncertainty regarding enforcement. However, businesses should prepare for potential compliance requirements as early as mid-February.
Current Status
On January 23, 2025, the U.S. Supreme Court lifted a nationwide preliminary injunction that had previously halted CTA enforcement in Texas Top Cop Shop, Inc. However, a separate injunction in Smith v. U.S. Department of Treasury remains in effect, temporarily preventing the Financial Crimes Enforcement Network (FinCEN) from enforcing CTA compliance. While this second injunction provides temporary relief, it is subject to further legal challenge.
Additionally, legislative efforts to repeal the CTA have been introduced in Congress, but these remain in committee and are unlikely to impact immediate compliance obligations.
What This Means for Businesses
Although CTA enforcement is currently paused, FinCEN has taken steps to challenge the Smith injunction, and businesses should prepare for compliance requirements to resume soon. The CTA mandates reporting of beneficial ownership information for many entities, and compliance preparations—such as identifying required reporting entities and gathering ownership data—should not be delayed.
Next Steps
KMWB advises businesses to:
- Monitor ongoing legal and legislative developments.
- Assess whether they fall within the scope of the CTA’s reporting requirements.
- Begin assembling the necessary information to ensure timely compliance if enforcement resumes.
We will continue to provide updates as this situation unfolds. If you have questions about how the CTA may impact your business, please contact us.
Media Contacts:
Briana Spariosu
Kucker Marino Winiarsky & Bittens, LLP
(212) 869-5030
bspariosu@kuckermarino.com