December 5, 2024
What Happened?
On December 3, 2024, a district court in Texas issued a nationwide preliminary injunction against the enforcement of the Corporate Transparency Act (CTA) and its reporting on Beneficial Ownership Information to the Treasury Department. This injunction delays the compliance deadline, however, businesses still face eventual compliance unless there is a permanent injunction or the law is struck down. The future of this legal challenge and potential changes under a new presidential administration mean businesses will have to determine whether a pause on compliance and a delay in reporting is the best course of action.
The CTA requires businesses operating in the U.S. to report on ownership information. The CTA’s goal is to curb the use of shell companies and complex ownership structures for money-laundering, terrorism, and other illegal activity by bringing transparency to otherwise opaque entities. The Financial Crimes Enforcement Network (FinCEN) includes the CTA and this transparency as part of its overall anti-money laundering efforts.
What this means for me
Large and small businesses alike will be pleased to put off compliance with the CTA. While the law was not aimed at the financial industry, it does show possible legal headwinds for other anti-money laundering regulations. We will continue to monitor FinCEN’s final rules and proposals for these compliance considerations.
