Ping-Pong Match Appears Over: US Companies Apparently Definitively Relieved Of Compliance Obligations Under The Corporate Transparency Act – Corporate and Company Law
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The Corporate Transparency Act (the CTA) requires a range of entities, primarily smaller, unregulated companies, to file reports with FinCen, and arm of the Treasury Department…
United States
Texas
Corporate/Commercial Law
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The Corporate Transparency Act (the CTA) requires a range of
entities, primarily smaller, unregulated companies, to file reports
with FinCen, and arm of the Treasury Department, identifying the
entities’ beneficial owners, and the persons who formed the
entity. The purpose of the CTA was to aid in the detection of
terrorism, money-laundering, and tax evasion.
As previously reported, the federal courts in Texas
preliminarily enjoined the enforcement of the CTA. When a court
recently lifted the last such injunction, FinCen set a new deadline
for compliance, but on March 2nd FinCen announced that
it would not enforce the CTA pending its issuance of new rules that
would make the CTA applicable only to “foreign reporting
companies,” as outlined in our client alert.
While we don’t expect any of this to change materially, we
advise that you continue to watch this space as the status of the
CTA has been quite volatile. We also recommend that you take into
account that the CTA is technically effective, just not being
enforced. Thus, pending the anticipated adoption of new rules,
failure to comply is technically a violation for the purposes, for
example, of reps and warranties in transaction documents.
Ping-Pong Match Appears Over: US Companies
Apparently Definitively Relieved of Compliance Obligations Under
the Corporate Transparency Act
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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