A recent federal court decision eliminates the present need for any person or company to comply with the Corporate Transparency Act (CTA) and its implementing regulations. This decision may be reversed upon appeal, but as of December 3, 2024, any person or company that was compelled under the CTA and its implementing regulations to file a beneficial ownership report with FinCEN or provide beneficial ownership information to a reporting company is no longer required to do so.
On December 3, 2024, the U.S. District Court for the Eastern District of Texas issued a preliminary injunction against the government's enforcement of the CTA. The plaintiffs in the case, Texas Top Cop Shop, Inc., et al. v. Garland, et al., argued that the CTA improperly compels speech, contradicts the right of anonymous association guaranteed by the First Amendment, and violates the Fourth Amendment by forcing the disclosure of private information. In its decision, the court stated that the CTA is likely unconstitutional as it is outside Congress's power.
Unless the issuing court in Texas or a higher federal court (here, the U.S. Court of Appeals for the Fifth Circuit or the U.S. Supreme Court) overturns the injunction, no one needs to comply with any portion of the CTA or its implementing regulations. We will update this guidance if any change occurs regarding this court decision.
Read the decision here.
