Supreme Court Update

On December 31, 2024, the Department of Justice filed an emergency application with the Supreme Court to lift the temporary pause on CTA reporting requirements. This 39-page application presents several key arguments:

- The Commerce Clause of the U.S. Constitution explicitly empowers Congress to regulate commerce across state lines and with foreign nations

- The CTA functions as an integral component of the Anti-Money Laundering Act

- The reporting requirements serve as an essential element in regulating broader economic activity

The Supreme Court has set January 10, 2025, at 4 p.m. ET as the deadline for affected parties to respond to the Department of Justice's request.

Understanding What's at Stake

The current legal proceedings focus on a distinct question: Should the reporting requirements remain active while courts examine the law's constitutional foundation? This differs from the broader examination of the CTA's constitutionality, which will undergo separate legal scrutiny.

The Corporate Transparency Act represents a cornerstone of the government's strategy to combat financial crimes. Under its provisions, businesses must report detailed information about their beneficial owners—those who ultimately own or control the company. This transparency helps government agencies identify and prevent financial crimes that often rely on obscured ownership structures. Hence, the government is heavily in favor of enacting this legislation.

Strategic Considerations for Business Owners

During this period of legal uncertainty, businesses face two primary options:

Proactive Compliance

Submitting beneficial ownership information voluntarily now offers several advantages:

- Avoids potential rush periods if requirements suddenly resume

- Reduces administrative burden by preventing last-minute filing pressures

- Minimizes risk of penalties if requirements are reinstated retroactively

Wait-and-See Approach

Some businesses might choose to delay reporting until final court decisions emerge.

Looking Ahead

While the Supreme Court's upcoming decision will significantly impact immediate reporting obligations, it represents just one step in the broader evolution of corporate transparency requirements. The fundamental question of the CTA's constitutionality remains separate from this current proceeding. Numerous steps and decision trees remain to understand if BOI Reporting will become mandatory for businesses and what the timeline is. Please look out for a free consult with Bridge to BOI via our personalized chat. Which we hope to launch soon.

Businesses prioritizing understanding and preparing for these requirements position themselves advantageously, regardless of the immediate legal outcome. Staying informed and prepared helps ensure smooth compliance if and when final requirements take effect.