Yesterday a federal court in Texas issued a nationwide preliminary injunction suspending enforcement of the Corporate Transparency Act (CTA) and its implementing regulations, including the requirement for filing Beneficial Ownership Information (BOI) reports.
What does this mean and what’s the impact on your business?
The U.S. District Court for the Eastern District of Texas issued the preliminary injunction on December 3, 2024, in its ruling on Texas Top Cop Shop, Inc. v. Garland, E.D. Tex., No. 4:24-cv-00478. The Court held that the CTA is likely unconstitutional and that its enforcement would irreparably harm reporting companies. The preliminary injunction prohibits the federal government from enforcing the CTA pending further order from the Court. This means that, at this time, existing reporting companies do not need to comply with the January 1, 2025 BOI reporting deadline and newly formed reporting companies do not need to comply with the 90 day BOI reporting deadline (which shortens to 30 days as of January 1, 2025).
A preliminary injunction is not final.
The ruling from the federal court in Texas is only a preliminary injunction; so it’s not the final word on the CTA…yet. An appeal would go to the United States Court of Appeals for the Fifth Circuit. Further appeals could take the case to the United States Supreme Court. A preliminary injunction means the Court still needs to make a final ruling on the constitutionality of the CTA.
Contact us to learn more.
For more specific details on what this latest ruling means for you and your business, please use our contact form to reach an attorney.
News Coverage
Previous Blog Posts
