On December 3, 2024, the U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction which temporarily blocks enforcement of the Corporate Transparency Act (CTA). What this means for reporting companies is that the January 1, 2025 deadline to file a Beneficial Ownership Information Report has been suspended for the time being.
In Texas Top Cop Shop v Garland et al., the U.S. District Court found that the CTA is likely unconstitutional as being outside of Congress’s power. This ruling, however, is not a final determination of the CTA’s constitutionality, but does have the effect of temporarily halting its enforcement while the case proceeds.
Although the CTA obligations have been temporarily suspended, reporting companies should keep a close eye on the progress of the case, as legal proceedings may reverse the injunction and potentially reinstate the CTA reporting requirements.
If you have any questions regarding the CTA or the current injunction, please feel free to reach out to any of the attorneys at FBFK.
