FinCEN to Comply With Nationwide Injunction of CTA Enforcement

Last week, we reported (Texas Court Enjoins the Enforcement of the Corporate Transparency Act) that the U.S. District Court for the Eastern District of Texas issued a preliminary injunction preventing the Corporate Transparency Act (CTA) from being enforced, subject to certain ambiguities that we believed the Financial Crimes Enforcement Network (FinCEN) would address.  

Today, FinCEN issued its guidance on the Texas injunction, https://fincen.gov/boi, indicating, that it would comply with the injunction for as long as it is in force and, importantly, that this applied to all companies, regardless of when their beneficial ownership reports are due, not just those for which the initial report was due January 1, 2025 or earlier.

Perhaps critically for many companies, FinCEN indicated in today’s announcement that any company failing to file its beneficial ownership report(s) during the span of the injunction would not be subject to liability.

This is a very important day for companies struggling with CTA compliance. It is notable that FinCEN did not say how long it would wait to start enforcing if and when the injunction is lifted.  Because of this, it may be prudent for companies to continue gathering beneficial ownership information, to enable themselves to file the CTA report promptly (if needed), or to file the CTA report while the injunction continues (which FinCEN says is still permitted), and because the first State law of this variety (the New York LLC Transparency Act) will take effect in January 2026, with California and Maryland transparency laws expected to follow closely behind.

Please reach out to the Brown Rudnick CTA Task Force with any questions.