BREAKING NEWS: Corporate Transparency Act Enforcement Enjoined, including Beneficial Ownership Reporting Requirements

On December 3, 2024, the U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction against the enforcement of the Corporate Transparency Act (CTA) in the case Texas Top Cop Shop, Inc., et al. v. Garland, et al., Case No. 4:24-cv-478 (E.D. Tex.). The Court ruled that the CTA and its associated Reporting Rule are likely unconstitutional and exceed Congress' authority. While an appeal is expected, the Court’s decision temporarily suspends the enforcement of the CTA, staying the beneficial ownership reporting deadlines. As a result, companies that qualify as a “Reporting Company” under the CTA are currently not required to submit a beneficial ownership report (BOIR) to the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN).

If your business has already filed a BOIR with FinCEN, there is currently no obligation to update it to reflect any changes that have occurred since the initial filing. If the CTA requires your company to file a BOIR, you are not currently obligated to do so. Regardless of whether your business has filed or is required to file a BOIR, it is strongly recommended that you continue to monitor developments regarding the ultimate disposition of the CTA. 

If you have any questions about the Corporate Transparency Act, please contact Attorneys Jeffrey E. Swaim, Jennifer Z. Flanagan, or Zachary B. Luczyk.