“Given the evolving legal landscape, it is advisable for affected businesses to stay informed about developments related to the CTA and prepare for potential compliance requirements pending the resolution of these legal challenges.” -Rose Law Group Corporate Transactions Director Shruti Gurudanti
BY MELISSA ANGELL | INC.
The Department of Justice is asking the Supreme Court to allow the Corporate Transparency Act (CTA) to move forward after a flurry of court rulings paused the measure from being enforced, then unpaused it, and then finally blocked it once again.
“We’ve never seen anything like this before,” says Bill Quick, an attorney at the Polsinelli law firm who chairs its CTA division “The usual timing, sequence, and process has seemed to be thrown out the window.”
Indeed, the past two weeks have seen a burst of action regarding the CTA, an anti-money laundering measure designed to elucidate company ownership structures by directing businesses to report their beneficial owners to the Financial Crimes Enforcement Network (FinCEN). In doing so, it will be harder for bad actors to conceal criminal activity behind shell companies.
On December 23, a panel from the Fifth Circuit Court of Appeals gave the CTA the green light by lifting a prior injunction implemented by a federal judge in Texas, one that pressed pause on rolling out the measure nationally. The National Federation of Independent Business, along with a group of small business owners, originally sought the injunction in a case known as Texas Top Cop Shop, after one of the plaintiffs.
