BREAKING NEWS ALERT – The U.S. Supreme Court Grants Government’s Motion to Stay the Nationwide Injunction on Enforcement of the Corporate Transparency Filing Requirements; Mandatory Reporting Not Yet Required But Voluntary Submissions Permitted
If you have been following our newsletters, you know that there has been a whirlwind of decisions concerning whether a nationwide injunction issued in the case entitled Texas Top Cop Shop, Inc., et al. v. McHenry, et al., No. 4:24-cv-00478 (E.D. Tex.) against the beneficial ownership information (BOI) reporting requirements under the Corporate Transparency Act (CTA) would stay in effect. After quickly making its way through the appeals process all the way to the U.S. Supreme Court, on January 23, 2025, the Supreme Court lifted the Appeals Court’s injunction, seemingly once again requiring reporting companies to file BOI reports under the CTA.
However, on the United States Government’s Financial Crimes Enforcement Network (FinCen) website, the following alert was posted the next day after the Supreme Court decision was issued entitled, “Alert: Ongoing Litigation – Texas Top Cop Shop, Inc., et al. v. McHenry, et al., No. 4:24-cv-00478 (E.D. Tex.) & Voluntary Submissions [Updated January 24, 2025],” which states:
In light of a recent federal court order, reporting companies are not currently required to file beneficial ownership information with FinCEN and are not subject to liability if they fail to do so while the order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports.
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On January 23, 2025, the Supreme Court granted the government’s motion to stay a nationwide injunction issued by a federal judge in Texas (Texas Top Cop Shop, Inc. v. McHenry—formerly, Texas Top Cop Shop v. Garland). As a separate nationwide order issued by a different federal judge in Texas (Smith v. U.S. Department of the Treasury) still remains in place, reporting companies are not currently required to file beneficial ownership information with FinCEN despite the Supreme Court’s action in Texas Top Cop Shop. Reporting companies also are not subject to liability if they fail to file this information while the Smith order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports.
Based on FinCen’s most recent alert, while Associations may not yet be required to file the beneficial ownership information with FinCen, Associations may still do so voluntarily.
In addition, notwithstanding the pending court cases, the reporting requirements were also extended for those in areas in this article that were impacted by Hurricane Beryl, Hurricane Debby, Hurricane Francine, Hurricane Helene, and Hurricane Milton, which extended the original January 1, 2025 deadline. Here is a link to Alerts issued for FinCEN, including this latest announcement, and for additional updates concerning the BOI reporting requirements and extension information for those impacted by the various hurricanes: https://fincen.gov/boi.
If your Association has not already voluntarily submitted the beneficial ownership information reports, and have any questions concerning whether your Association should do so, please contact your Association’s general counsel.