WASHINGTON—The U.S. Supreme Court has ordered a stay of a nationwide injunction preventing enforcement of the Corporate Transparency Act and its requirement for businesses to report their beneficial ownership information to the Financial Crimes Enforcement Network.
The justices put on hold a nationwide injunction issued on Dec. 3 by Texas-based U.S. District Judge Amos Mazzant who, at the behest of small businesses, had concluded that Congress overstepped its powers under the U.S. Constitution in passing the Corporate Transparency Act in 2021, Reuters said.
The law's enforcement remains blocked and companies still are not required to report information as a result of a separate order issued on Jan. 7 in another case by Texas-based U.S. District Judge Jeremy Kernodle, Reuters added.
Lawyers at the conservative Center for Individual Rights, representing the small businesses in the Supreme Court case, cited the other ruling in saying it was now up to the new Republican president's administration to decide what to do, Reuters said.
The justices acted after the New Orleans-based 5th U.S. Circuit Court of Appeals allowed the injunction to take effect ahead of a Jan. 13 deadline that most companies had faced to submit their initial reports to the Treasury Department's Financial Crimes Enforcement Network.