On December 3, 2024, a Texas-based federal court issued a sweeping order prohibiting the federal government from enforcing the Corporate Transparency Act (CTA) anywhere in the country. Texas Top Cop Shop, Inc., et al. v. Garland, et al., Case No. 4:24-cv-478 (E.D. Tex.). The Court entered a preliminary injunction to halt the CTA’s enforcement nationwide, specifically stating that neither the Act nor its related regulations may be enforced, and that “reporting companies need not comply with the CTA’s January 1, 2025, BOI reporting deadline[.]
It is important to note that the preliminary injunction only temporarily enjoins enforcement of the CTA and is subject to appeal and further procedural developments. Whether and when an appeal may be filed, and the timing and outcome of an appeal, are all uncertain. Such developments may happen quickly or without advance notice, and any changes may or may not include an extension to the deadlines specified by the CTA. FinCEN has not yet issued any related statement or guidance in the wake of this nationwide preliminary injunction. We’ll be on alert for an announcement from the U.S. Department of Justice, U.S. Department of the Treasury or FinCEN itself addressing the issues comprehensively in advance of appellate review.
Although the nationwide preliminary injunction relieves the immediate obligation – i.e., right now – to file beneficial ownership reports with FinCEN, it would be prudent for non-exempt reporting entities that haven’t yet filed to continue to prepare for their report filing by continuing to gather all information and documents that the CTA requires. Being fully prepared with a true, correct and complete FinCEN reporting form and ready to “hit send,” if ultimately required, should help ensure the protection of a Reporting Company’s interests.
For further guidance regarding the impact of this case on your filings, we recommend consulting your attorney.
