Category: Corporate Law

Client Alert: Treasury Suspends CTA Enforcement for U.S. Citizens & Domestic Companies

On March 2, 2025, the U.S. Treasury announced a temporary suspension of Corporate Transparency Act (CTA) enforcement for U.S. citizens, domestic reporting companies, and their beneficial owners, and indicated it intends to narrow the CTA’s scope so that the reporting requirements apply only to foreign reporting companies.

Here’s what this means:
🔹Narrowing the Scope of Reporting: The Treasury aims to limit CTA reporting only to foreign reporting companies, potentially eliminating compliance for U.S. businesses.
🔹Enforcement Temporarily Paused: While the CTA’s reporting obligations remain in place, no penalties or fines for noncompliance will be issued at this time.
🔹Upcoming Rule Changes: FinCEN is expected to release an interim final rule by March 21, 2025, extending deadlines and clarifying BOI reporting obligations.

Next Steps for Businesses:
✅ Domestic Companies: If you’ve already filed BOI reports or were preparing to, consider pausing further action until FinCEN provides clarity.
✅ Foreign Companies: Continue preparing BOI reports, given reporting obligations are likely to remain, but consider waiting to file until further guidance is provided by FinCEN.
✅ Stay Alert: More guidance is coming soon— stay tuned for revised reporting requirements and additional enforcement decisions.

We’re tracking developments and will provide updates as FinCEN releases new guidance. Read more here.

For more information on our CTA team, visit their bios here:
Lorren Patterson
Paul-Kalvin Collins
Japera Parker

#CorporateTransparencyAct #CTA #FinCEN #BOI #RegulatoryCompliance #LegalUpdate

Client Alert: “CTA Whiplash: FinCEN Pumps the Brakes on Enforcement—What’s Next?”

Just as companies were gearing up to meet the March 21st deadline for Corporate Transparency Act (CTA) compliance, FinCEN hit the brakes on enforcement. On Thursday, FinCEN announced it will not issue fines, penalties, or take enforcement actions against companies that fail to file or update beneficial ownership information (BOI) reports while it works on extending deadlines.

What Just Happened?
• Feb. 17-18 – A federal court lifts the last nationwide injunction, reinstating CTA reporting requirements. In response, FinCEN extends the filing deadline for most companies to March 21, 2025.
• Feb. 27 – FinCEN announces that non-compliance won’t be penalized—for now.

What’s Next?
• By March 21, 2025 – FinCEN expects to issue an interim final rule extending BOI deadlines.
• Later in 2025 – FinCEN plans to revise reporting requirements to reduce the burden on small businesses.

What Does This Mean for You?
• Filing is effectively voluntary (for now). Companies may choose to hold off until clearer guidance is issued.
• Corrections may still be necessary—FinCEN’s pause doesn’t explicitly cover fixing past errors.
• Stay informed—Federal litigation and legislative challenges to the CTA are ongoing.

Buckle up—the CTA ride isn’t over yet. We’re tracking developments and will provide updates as FinCEN releases new guidance. Read more here.

For more information on our CTA team, visit their bios here:
Lorren Patterson
Paul-Kalvin Collins
Japera Parker

#CorporateTransparencyAct #CTA #FinCEN #BOI #RegulatoryCompliance #LegalUpdate

Client Alert: CTA Springs Back into Action – New BOI Report Filing Deadline Set for March 21, 2025

Mark your calendars. After months of legal back and forth, the Corporate Transparency Act (“CTA”) reporting requirements are back in effect, for now, with a new deadline of March 21, 2025.

The U.S. District Court for the Eastern District of Texas lifted its nationwide preliminary injunction, aligning with the Supreme Court of the United States’ decision earlier this year to stay a similar nationwide injunction. Consequently, reporting obligations are back on and FinCEN has extended the filing deadline to March 21, 2025.

Action Steps:
✅ Assess Your Status and Compile Ownership and Control Information: Assess if your entity qualifies as a “reporting company” under the CTA and gather the most up to date ownership and control information for your entity.
✅ Obtain FinCEN IDs or Identifying Information: Collect identifying information for each person who qualifies as a “beneficial owner” under the CTA. Encourage beneficial owners to secure a FinCEN ID to streamline reporting.
✅ Prepare for Submission: Be ready to file initial, updated, or corrected Beneficial Ownership Information (BOI) reports by the March 21 deadline using FinCEN’s E-Filing system.
✅ Stay Informed: Monitor ongoing federal litigation and potential legislative changes affecting CTA requirements.

FinCEN acknowledges that reporting companies may need additional time to meet the March 21 deadline and has stated that if it opts to modify the deadline, an update will be shared before that date. Additionally, in the coming months, FinCEN intends to revise reporting rules to reduce burdens for low-risk entities, including U.S. small businesses, while focusing on entities posing greater national security risks. This may include developing additional reporting exemptions.

Our CTA team will keep you updated on the latest developments. To read the full Client Alert, visit here.

For more information on our CTA team, visit their bios here:
Lorren Patterson
Paul-Kalvin Collins
Japera Parker

#CorporateTransparencyAct #CTA #FinCEN #BusinessCompliance #LegalUpdate

Client Alert: “The Rollercoaster Ride Continues: CTA Reporting Obligations Still on Hold”

The Corporate Transparency Act (“CTA”) continues to take reporting companies on a roller coaster ride. Now, there are not just one, but two Eastern District of Texas federal cases challenging the requirement for certain companies to disclose their beneficial ownership information to the Financial Crimes Enforcement Network (“FinCEN”).

While you should hold on tight with your seatbelt fastened, the bottom line is that, for the time being, the reporting requirements are still on hold.

What’s Happening?
Two separate cases in the Eastern District of Texas have led to nationwide injunctions blocking enforcement of CTA’s beneficial ownership reporting requirements. The Supreme Court of the United States briefly reinstated the reporting requirement in Texas Top Cop Shop v. Garland, but a second case, Smith v. U.S. Department of the Treasury, has put reporting on hold again. Now, the government has appealed the Smith injunction with FinCEN indicating it will briefly extend reporting deadlines and potentially modify its requirements altogether for lower-risk entities, should the government succeed.

What It Means for Businesses:
✅ No Immediate Filing Required – Companies are NOT currently required to file beneficial ownership information within FinCEN.
✅ No Penalties for Missed Deadlines – Entities that missed earlier deadlines will not face penalties while the injunctions are in place.
✅ Assess Your Status and Compile Information – Determine if your entity qualifies as a “reporting company,” and if so, continue to gather BOI and stay on top of ownership changes.
✅ Stay Informed – The legal status of the CTA is evolving quickly with the potential for revised requirements or quickly reinstated deadlines.
✅ Voluntary Reporting – You can still submit reports to FinCEN, but it’s not required.

Our CTA team will keep you updated on the latest developments. To read the full Client Alert, visit here.

For more information on our CTA team, visit their bios here:
Lorren Patterson
Paul-Kalvin Collins
Japera Parker

UPDATE: FinCEN Responds to Preliminary Injunction on CTA Enforcement

As we shared in our client alert last week, on December 3, 2024, the U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction in Texas Top Cop Shop, Inc., et al. v. Garland, et al., temporarily halting enforcement of the Corporate Transparency Act (“CTA”) and its beneficial ownership information (“BOI”) reporting requirements.

In response, FinCEN announced it will comply with the Court’s order for as long as it remains in effect, noting that during this time reporting companies are not currently required to file BOI reports and will not face penalties for failing to report while the injunction remains in effect. Voluntary submissions, however, are still permitted.

What This Means for You:

No Immediate Filing Requirement: The preliminary injunction stays all BOI reporting requirement deadlines for now. Reporting companies are momentarily relieved of reporting obligations.

Litigation Ongoing: As expected, the Department of Justice filed a Notice of Appeal on behalf of the Department of the Treasury, signaling the government’s intent to challenge the court’s decision. The ultimate status of the injunction and the CTA remains uncertain, pending further court rulings or guidance.

Preparation Still Recommended: While filing is currently paused, reporting companies should nevertheless continue assessing their BOI reporting requirements and gathering necessary information to ensure readiness if the injunction is lifted. FinCEN has not yet provided guidance on how much time reporting companies will be granted to file their BOI reports if the Texas District Court’s injunction is lifted and how quickly enforcement of the CTA would resume.
Next Steps

We advise clients to monitor this matter closely and maintain preparation for potential filing requirements. Our team is actively tracking developments and will provide updates as the matter evolves. To read more on the recent CTA preliminary injunction in Texas Top Cop Shop, Inc., et al. v. Garland, et al., visit here.

If you have specific questions or need assistance with your compliance strategy, please do not hesitate to contact the BG CTA Team:

Lorren Patterson – lpatterson@baileyglasser.com

Paul-Kalvin Collins – pcollins@baileyglasser.com

Japera Parker – jparker@baileyglasser.com

Client Alert: Holiday Surprise: Nationwide Injunction Halts Corporate Transparency Act Enforcement

Authored by Corporate Practice Group partner Lorren Patterson and corporate attorneys Paul-Kalvin Collins and Japera Parker

Introduction

The Corporate Transparency Act (“CTA”) requires most companies—except for certain exempt entities—to disclose their ownership details to the Financial Crimes Enforcement Network (“FinCEN”). A looming January 1, 2025 reporting deadline for entities formed prior to January 1, 2024 had many companies and compliance departments on edge. But mere weeks before this deadline, a federal court issued a nationwide injunction, preliminarily enjoining the CTA’s enforcement and staying reporting requirements. This temporary relief gives businesses that have yet to submit their information to FinCEN a welcome pause, although this could change rapidly depending on the government’s next steps.

In this article, we break down the outcome of the ruling and explain how it could affect your business, whether you have already filed your information with FinCEN or were preparing to do so by the end of the year.

Texas Federal Court Steps in and Gives a (Temporary) Holiday Gift

On December 3, 2024, in Texas Top Cop Shop, Inc., et al. v. Garland, et al., Case No. 4:24-cv-478 (E.D. Tex.), the U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction temporarily prohibiting the enforcement of the CTA and the FinCEN Reporting Rule.

The CTA and Reporting Rule require domestic entities created by the filing of a document with a secretary of state and foreign entities that have registered to do business in the United States (“Reporting Companies”) to file a Beneficial Ownership Information (“BOI”) Report with FinCEN, identifying personal information about the individuals who directly or indirectly own a certain percentage or otherwise control the company, subject to certain exemptions from reporting.

The Court’s decision temporarily halts the CTA’s reporting requirements and enforcement mechanisms for all Reporting Companies across the United States, providing a potential reprieve to approximately 32.6 million entities that were preparing to comply with the January 1, 2025 deadline. Read more.

Partner Michael Hawthorne to Speak on Estate and Business Succession Planning at Strafford CLE Webinar

Michael Hawthorne, partner in Bailey Glasser’s Corporate Practice Group, will be a panelist at Strafford’s CLE Webinar titled, “Estate and Business Succession Planning: Estate and Tax Considerations, Planning Vehicles, Best Practices” on Friday, November 15, 2024, sharing his invaluable experience in leveraging his multi-disciplinary approach in how to grow and successfully implement succession plans.

Mr. Hawthorne is nationally recognized in the areas of corporate law, mergers and acquisitions (M&A), and securities law. He has extensive experience working on securities matters and helps his clients comply with related laws and regulations, and also works with clients involved in complex commercial litigation. Mr. Hawthorne has extensive experience in working with tax laws and how to structure companies and deals to help work with and maximize tax benefits and savings (e.g., tax-free transactions, 1202 benefits, partnership taxation, like-kind exchanges, tax incentives and financings).

Learn more and register for this event here.

BG Welcomes Three New Lawyers to Washington, D.C. Office

Bailey & Glasser, LLP has added three new lawyers to the firm’s Washington, D.C. office. Hallie Arena is the newest member of the Commercial & Environmental Litigation practice group, Allison Bruff has joined the Consumer Litigation practice group, and Japera Parker has joined the firm’s Corporate practice group.

Hallie Arena brings valuable courtroom and legal writing experience in criminal matters and complex civil litigation, having completed a federal clerkship in the United States District Court for the Southern District of West Virginia with the Honorable Judge Joseph R. Goodwin and interned in the same court with Judge Frank W. Volk. As a West Virginia University College of Law graduate, she was a member of the order of the coif and served as the Executive Notes Editor for the West Virginia Law Review. Hallie was also the president of the Sports and Entertainment Law Society, drawing on her prior work for two professional basketball teams, the Atlanta Hawks and the Los Angeles Clippers. While in law school, Hallie also participated as a student practitioner in the United States Supreme Court Clinic.

Allison Bruff brings to the firm considerable experience in the federal judiciary. Before joining Bailey Glasser, she served as a Supreme Court Fellow at both the U.S. Sentencing Commission and the Office of the Counselor to the Chief Justice of the United States. She also worked in the Office of the General Counsel at the Administrative Office of the U.S. Courts, advising the Judicial Conference’s Advisory Committee on Federal Rules of Civil and Criminal Procedure. Additionally, Allison’s experience includes federal clerkships with the Honorable Judge Julia Smith Gibbons of the United States Court of Appeals for the Sixth Circuit and for the Honorable Judge David G. Campbell during his tenure as Chair of the Judicial Conference Committee on Rules of Practice and Procedure. Allison graduated summa cum laude from the University of Mississippi School of Law.

Japera Parker brings a unique background to Bailey Glasser. Her prior legal experience includes positions at major technology companies and top technology/life science law firms. Japera is deeply committed to her community, focusing on creating opportunities for female and underrepresented founders to gain access to essential capital and quality legal guidance, drawing on her personal experience as an entrepreneur for three early-stage companies in the areas of real estate and fashion. Japera is a graduate of the University of Maryland Francis King Carey School of Law, graduating cum laude with certifications in both business law and intellectual property law. Before law school, Japera was an educator and taught middle and high school English before becoming a school director and teacher coach.

We’re excited to welcome our new lawyers to the Bailey Glasser team and look forward to the valuable perspectives and experiences they bring to our firm.

#welcome #corporate #transactional #litigation #consumer #commercial #environmental #baileyglasser

Avoiding a Difficult Corporate Divorce: BG Successfully Reorganizes Media Company

Avoiding a difficult corporate divorce: BG partner Jeff Craven recently served as counsel for the leader of a top D.C. media strategy and public affairs company who wished to buy out her two partners when their vision for the company was no longer aligned, which was complicated because the Operating Agreement didn’t provide sufficient guidance for the “corporate divorce.” A mediation also failed.

Jeff, and lawyers for the other partners, organized a structured process to draft a detailed Letter of Intent which, once executed, was easily converted to a Settlement Agreement and Release. The terms allowed our client to purchase the other two owners’ interests, largely on a deferred basis and with appropriate security devices and reasonable restrictive covenants that gave each party confidence that the longer-term outcome contemplated under the Agreement would be realized.

Through this process, the parties avoided litigation by finding a creative, balanced solution that allowed the parties to divide the assets while maintaining the business’s value.

Jeff Craven commented: “It’s often best to find a way to air out differences and identify counsel who can construct a creative and balanced approach where nobody is entirely happy and each party gives a little, but everyone can point to an important element of the deal that is valuable to them. As with marital assets, finding common ground can be dicey, but by being honest about what’s most (and least) important, creative counsel can help frame a way to divide the assets and craft a path forward so that the value of the business can be maintained, even as its pieces are held separately, and even on a secured debt basis.”

“The alternative, litigation, is almost always more upsetting and expensive. This is also a good reminder for entrepreneurs that having an Operating Agreement that covers the operating of an entity as well as its dissolution (in all of its forms) is a best practice,” he added.

Jeff understands the many lifecycles that companies experience and handles the beginning, middle, and end of many corporate issues. He also regularly acts as a fractional Outside General Counsel for companies who don’t need a full-time in-house counsel yet have sophisticated operations that could use sage corporate counsel.

For more about Jeff, visit here.
#CorporateLaw #CorporateDivorce #BaileyGlasser

Brian Glasser Named a Top 200 Lawyer in America by Forbes

Bailey Glasser founding partner Brian Glasser has been named one of “America’s Top 200 Lawyers” by Forbes in its first-ever elite lawyer list.

Forbes described its criteria as follows: “[t]he elite lawyers on this list were selected through a rigorous, multi-stage process of researching, evaluating and rating thousands of candidates, conducted by an editorial team with broad experience in law practice and the legal marketplace. The result is a collection of top lawyers involved in the most consequential cases, deals or legal trends in recent years . . . . they all share reputations for integrity, records of excellence—and Forbes’ recognition as the best in the business. What follows is a power list of lawyers whose skill, passion and purpose set them apart—for when you or your business need it most.”

In the last two years alone, Brian won a $5 million award against MyPillow CEO and election conspiracist Michael Lindell; helped lead the challenge to Johnson & Johnson’s “Texas Two Step” bankruptcy maneuver on behalf of people injured by J&J’s asbestos-riddled talc products; helped win dismissal of the bankruptcy of 3M subsidiary Aearo Technologies by a federal judge which thereafter resulted in the $6 billion settlement of more than 260,000 lawsuits brought by veterans and U.S. service members alleging that 3M military earplugs caused their hearing loss; and has won tens of millions of dollars for his clients in other lawsuits. He has also led the filing of hundreds of lawsuits on behalf of people abused as minors by the State of Maryland’s juvenile hall facilities via a new law passed in October 2023 that permitted previously time-barred claims by abuse survivors.

Read more here.

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