As you may have been following, PilieroMazza previously reported on the requirements of the Corporate Transparency Act (CTA) and the reporting requirements that are associated therewith (Part 1, Part 2, and Part 3). On December 3, 2024, in the case of Texas Top Cop Shop, Inc. et al. v. Garland et al., the U.S. District Court for the Eastern District of Texas issued a preliminary injunction against the enforcement of the CTA that applies nationwide. In its ruling, the court found that the “CTA is likely unconstitutional as outside of Congress’s power.” It follows, then, that a company’s reporting requirement is also “likely unconstitutional for the same reasons.”
The court explained that neither the CTA nor the reporting requirement may be enforced and “reporting companies need not comply with the CTA’s January 1, 2025, BOI reporting deadline pending further order of the Court.”
It is important to understand that this is simply a preliminary injunction, not permanent, and does not mean that the CTA or its reporting requirements have definitively been found to be contrary to law or unconstitutional. At present, the requirement to report has stayed, i.e., suspended nationwide. Any company that is a reporting company should continue to monitor the status.
