UPDATED January 24, 2025… Corporate Transparency Act Requirements Suspended: Reporting Not Currently Required

The Corporate Transparency Act (CTA) is a federal law aimed at combating financial crimes like money laundering and tax evasion. Under the CTA, most corporations, limited liability companies (LLCs), and similar entities are required to disclose their “beneficial owners”—individuals who own or control at least 25% of the business or exercise significant decision-making authority.  

On January 1, 2024, the CTA’s rules went into effect. Entities created before that date were given until January 1, 2025 to comply, while companies formed during 2024 were given 90 days to report the beneficial ownership information.

Several court actions were filed, challenging the new requirement.  The rulings since that time have gone back and forth, with a series of injunctions from some courts prohibiting the enforcement of the law while other courts allowing it.  As of today (January 24, 2025), the CTA is not enforceable as a result of a nationwide injunction from a district court in Texas, despite a contrary United States Supreme Court ruling in a separate case.  Please note, however, that this injunction could be lifted or other circumstances could change at any time.  

Highlights of legal challenges:

As noted, several court actions were filed in 2024 challenging the new requirement.  For example, a federal district court in Alabama ruled early in 2024 that the CTA was unconstitutional. Plaintiffs in that case were granted summary judgement, and CTA enforcement was suspended only for the named plaintiffs and members of the National Small Business Association.  

However, rulings with larger effect came about at the end of 2024.  One of those began on December 3rd, 2024 when Judge Amos Mazzant, a federal judge in Texas, issued a nationwide injunction. This injunction paused the reporting deadlines and prevents enforcement of the regulations. The ruling in Texas Top Cop Shop, Inc. v. Garland was in response to a request for a preliminary injunction, where the court found that the plaintiffs demonstrated a substantial likelihood of success on the merits of their claims. It was not a final determination of the case itself. The case was appealed, and the 5th Circuit Court of Appeals was asked two things: to decide based on the merits of the case, and to decide whether the injunction was issued appropriately.  And this is where the road zigzagged!  

On December 23rd, the 3-judge panel (the “motion” panel) responsible for considering the injunction decided that it was not issued appropriately and suspended enforcement of the injunction, reinstating the reporting requirements.  Then, on December 27th, a 3-judge panel responsible for deciding the merits of the case (the “merits” panel) overturned the motion panel and reinstated the injunction.  The foundation of the ruling, according to the court, was “to preserve the constitutional status quo while the merits panel considers the parties weighty substantive arguments”.  Arguments for the appeal have been scheduled for March 25th in New Orleans. 

The government chose to appeal the ruling of the merits panel to the United States Supreme Court (“SCOTUS”), arguing that the injunction should be lifted.  On January 23, 2025, SCOTUS issued a ruling on the government’s “application for stay,” agreeing that the injunction should be lifted (and reporting requirements reinstated) until the litigation has finished.  And if this were the only case at issue, that would have been the end of the story.  However, in the meantime, another district court judge had considered the issue.

In that case, plaintiffs Samantha Smith and Robert Means are Texas residents who each own a real estate LLC that is operated solely within their home state.  They challenged the constitutionality of the law, and Federal District Court Judge Jeremy Kernodle agreed with their contentions for the purposes of a preliminary ruling.  Like the Texas Top Cop Shop decision, this was not a ruling on the merits- it did not end the case, but just put everything on hold until a final determination can be made.  Ultimately, Judge Kernodle’s January 7th ruling suspended CTA enforcement for Smith and Means, while also acting as a second nationwide stay.  An appeal has not been filed in the Smith/Means case, although the time for filing an appeal has not expired.  

As of today, while SCOTUS lifted the injunction in Texas Top Cop Shop, they have not yet acted (or even been requested to act) on the Smith/Means decision.  As a result, the Smith/Means stay remains in place, and the CTA is not enforceable.  The bottom line is that, as of January 24th 2025, entities are not required to file the beneficial ownership report.

Reporting Requirements:

While they have been placed on hold, and entities are not required to comply by a specific date, many businesses have already submitted the CTA information.  Others may choose to do so in the future. To comply with the CTA, reporting entities will need to:

  1. Identify Beneficial Owners: Determine who qualifies as a beneficial owner within your company. Consider factors like ownership percentage and decision-making power.
  2. Collect Required Information: Gather key details about each beneficial owner, including their full legal name, date of birth, residential address, and an identification number (e.g., from a passport or driver’s license), as well as a scan or picture of that identifying document.
  3. Submit Information to FinCEN: File the information securely with the Financial Crimes Enforcement Network (FinCEN) through its online reporting system. Detailed instructions are available on the FinCEN website.

What’s next:

If you are a business who has already submitted the beneficial ownership information, the regulations include an ongoing requirement to update the report if information changes.  However, because of the injunction, those requirements are currently suspended.  That does not mean that the ongoing requirement to update the report is removed completely!  That requirement could be reinstated or changed based on further developments in this court case (or others), changes in the regulations or guidance or even further Congressional action.  For example, legislation has recently been proposed in both the House and Senate that would repeal the CTA reporting requirements.  For all of these reasons, it is essential to pay attention to future developments. 

If you are an entity who has not submitted the beneficial ownership information, your obligation to do so has been suspended.  Again, this does not mean that the obligation is completely eliminated, just that as of this moment you are not required to meet the previously-mentioned deadlines.  You should keep up with future changes in this fluid situation, to avoid possible future liability.  It might also be helpful to reach out to a legal or financial professional to discuss next steps.  If the injunction is overturned on appeal, businesses may need to act quickly to meet reporting deadlines.  Information on finding an attorney in your area is available here.  Further, the FinCEN website provides additional resources and information to clarify requirements and streamline reporting.

For more information on the CTA and its requirements, the National Agricultural Law Center has a recorded webinar and factsheet available.  Additionally, the Center for Agricultural Law and Taxation has followed the issue closely, and has resources, including a brief update on pending court challenges, available here.  To be clear, these resources cover the CTA requirements, which have now been suspended due to the Smith/Means ruling.  Unless and until there are future changes with litigation or policy changes, regulated entities are not required to comply with the CTA reporting requirements.  


Rumley, Elizabeth. “Corporate Transparency Act Deadline Upcoming.Southern Ag Today 4(48.5). November 29, 2024. Permalink