As an update to our post on the Corporate Transparency Act, on December 3, 2024, a federal district court issued a nationwide preliminary injunction pertaining to the Corporate Transparency Act in Texas Top Cop Shop, Inc. v. Garland. In its ruling, the court stated that “reporting companies need not comply with the CTA’s January 1, 2025, [beneficial ownership information] reporting deadline pending further order of the Court.” [1] On December 5, 2024, this ruling was appealed. [2]
Accordingly, on December 9, 2024, the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) released an update acknowledging that reporting companies are not required to file beneficial ownership information with FinCEN at this time. However, this is subject to change and reporting companies may ultimately be required to comply with the Corporate Transparency Act, depending on the appellate court’s decision. Pending this decision, FinCEN is accepting voluntary beneficial ownership information reports. It is not apparent how much additional time will be provided for companies to file beneficial ownership information reports if the injunction is overturned.
More details on the status of the Corporate Transparency Act and the related preliminary injunction may be found at https://fincen.gov/boi.
[1] Texas Top Cop Shop, Inc. v. Garland, No. 4:24-CV-478, 2024 WL 4953814 (E.D. Tex. Dec. 3, 2024) (court issued “Amended Memorandum Opinion and Order” on December 5, 2024 to correct typographical error that did not impact court’s analysis and holding).
[2] CT Corporation Staff, Government appeals Federal District Court’s issuance of nationwide preliminary injunction against the Corporate Transparency Act, Wolters Kluwer (Dec. 5, 2024), https://www.wolterskluwer.com/en/expert-insights/government-appeals-federal-district-courts-issuance-of-nationwide-preliminary-injunction-against-cta
