On December 3, 2024, a Texas federal district court judge in Texas Top Cop Shop, Inc., et al. v. Garland, et al., No. 4:24-cv-00478 (E.D. Tex., Dec. 3, 2024) issued a preliminary injunction nationwide temporarily halting enforcement of the Corporate Transparency Act (CTA) and the U.S. Department of the Treasury’s Financial Crimes Enforcement Network’s (FinCEN) regulations on Beneficial Ownership Information Reporting Requirements (BOI Reporting Requirements). FinCEN’s BOI Reporting Requirements went into effect on January 1, 2024, and require Reporting Companies to file a report with FinCEN that includes information about the Reporting Company, its Beneficial Owners, and its Company Applicants (BOI Report).
While we anticipate that FinCEN will challenge the Texas court’s decision, as of the time of this alert, FinCEN has not issued a public response. Thus, it is not clear how FinCEN views the decision or whether and how the decision might be challenged. Given the uncertainty, Reporting Companies should be prepared to file their BOI Report by the stated deadlines. We will continue to monitor events and provide updates.
As a reminder, the CTA requires Reporting Companies created or registered to do business in the U.S. prior to January 1, 2024, to submit their BOI Report by January 1, 2025. Reporting Companies created or registered to do business in the U.S. between January 1, 2024 and December 31, 2024 are required to file their BOI Report within 90 days of formation or creation. For more information on the CTA and the BOI Reporting Requirements, please see our previous alerts (Important Filing Deadline: The U.S. Corporate Transparency Act, New Year, New Laws, New Obligations: The Corporate Transparency Act’s Beneficial Ownership Information Reporting Requirements, and Final Regulations on Beneficial Ownership Will require “Tens of Millions” of Legal Entities to File Reports).
