Ping Pong Rules: Corporate Transparency Act Back In Effect (Again)

On February 18, 2025, U.S. District Judge Jeremy Kernodle of the Eastern District of Texas stayed his prior injunction against enforcement of the Corporate Transparency Act (the "CTA") pending appeal by the U.S. Department of Justice. That injunction had remained in effect despite the ruling by the U.S. Supreme Court that the federal government may enforce the CTA with respect to an injunction issued by a different court in the same U.S. District in Texas.

The CTA requires a range of entities, primarily smaller, otherwise unregulated companies, to file a report with the U.S. Department of the Treasury's Financial Crimes Enforcement Network ("FinCEN") identifying the entities' beneficial owners—the persons who ultimately own or control the company—and provide similar identifying information about the persons who formed the entity. The CTA also authorizes FinCEN to disclose this information to authorized government authorities and to financial institutions in certain