Business owners nationwide received an early Christmas gift this week, when the Eastern District of Texas District Court issued a preliminary nationwide injunction against the much-maligned Corporate Transparency Act (CTA).
The court specifically granted the injunction, blocking the U.S. Department of Treasury from enforcing the Beneficial Ownership Information (BOI) reporting requirements – which were to become due on January 1, 2025. Judge Amos L. Mazzant III held that the Treasury Department is prohibited from enforcing the CTA and the corresponding regulations – including the January 1, 2025 reporting deadline. He declared that “Neither may be enforced, and reporting companies need not comply with the CTA’s January 1, 2025, beneficial ownership information (BOI) reporting deadline pending further order of the Court.”
This preliminary injunction halts enforcement and compliance with the Act’s BOI reporting requirements across the United States. While this ruling is a positive development for business owners nationwide, it is not the final resolution – the decision will likely be appealed by the Department of Justice, requiring a ruling from the appellate courts, and possibly the U.S. Supreme Court. The full opinion in the case of Texas Top Cop Shop, Inc., et al. v. Garland, et al can be found at cta-v-garland-district-court-opinion-preliminary-injunction.pdf.
The CTA and the regulations issued by the Financial Crimes Enforcement Network (“FinCEN”) required most U.S. businesses and foreign entities registered to do business in the United States to file reports with FinCEN disclosing information about the entity and each of its beneficial owners.
For more information on the status of the BOI requirements, and other pressing employment and business matters, please visit our website at https://koeglelaw.com/publications for more information.
