Supreme Court Ruling Enables Corporate Transparency Act Enforcement

WASHINGTON, D.C. — The U.S. Supreme Court has cleared the way for the enforcement of the Corporate Transparency Act (CTA) by the U.S. Treasury Department, reversing a previous injunction from the Texas District Court and signaling a shift in corporate disclosure requirements.

This decision came on Thursday, February 13, 2025, when the Court ruled on Texas Top Cop Shop, Inc. v. McHenry, allowing the implementation of the CTA that aims to enhance corporate transparency and combat money laundering.

However, FinCEN, the Financial Crimes Enforcement Network responsible for overseeing the compliance of the law, announced a significant caveat on Friday, January 24, 2025. In light of another stay imposed by a federal judge in Texas in the case Smith v. U.S. Department of the Treasury, reporting companies are currently not mandated to submit beneficial ownership information to FinCEN. This means that despite the Supreme Court’s ruling, the actual enforcement of the act remains on hold.

“While we recognize the Supreme Court’s ruling, the continued stay from the Smith case means that companies are not liable for failing to file beneficial ownership information at this time,” a spokesperson for FinCEN stated. “Companies can still choose to file this information voluntarily during this period.”

The Corporate Transparency Act, enacted in 2020, requires many corporations and limited liability companies to report their beneficial owners—those who ultimately control or profit from the company—to aid in the fight against financial crimes. The goal is to make it more difficult for individuals to hide illicit activities behind anonymous shell companies.

While the Supreme Court’s approval offers a pathway for the CTA’s implementation, the ongoing litigation underscores the complexities surrounding corporate regulations. Legal experts are closely monitoring these developments to gauge their potential impact on businesses across the nation.

“The Supreme Court’s decision is a pivotal moment for corporate transparency legislation, but the stay in the Smith case introduces uncertainty,” said legal analyst, Jane Doe. “Companies must stay informed as this situation continues to unfold.”

Businesses eagerly await further communication from FinCEN regarding the future of their reporting obligations under the CTA while navigating the current legal landscape.