On December 3, 2024, the U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction against the enforcement of the Corporate Transparency Act (CTA). This injunction temporarily halts the requirement for companies to comply with the CTA’s reporting rules, which were set to take effect on January 1, 2025 (for companies established prior to 2024).
The court found that the plaintiffs, in this case, demonstrated that the CTA and its reporting rule likely is unconstitutional. As a result, the enforcement of the CTA and its reporting requirements have been paused until further legal proceedings determine the final status of the CTA.
The injunction against the Corporate Transparency Act (CTA) has several important implications for businesses:
- Temporary Relief from Reporting Requirements: Businesses are temporarily exempt from the CTA’s requirement to report beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN). This means companies do not need to comply with the January 1, 2025, deadline for now.
- Uncertainty and Need for Vigilance: The injunction is not a final ruling on the CTA’s constitutionality. Businesses should stay informed and be prepared to comply if the injunction is lifted or if further legal developments occur.
While the injunction provides temporary relief, it’s important to stay vigilant and consider how potential changes could affect your specific circumstances. If you’d like to explore what this might mean for your business, reach out to Joe Barreca – we’re here to help.
Read more about The Corporate Transparency Act or about Beneficial Ownership Reporting.
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Councilor, Buchanan & Mitchell (CBM) is a professional services firm delivering tax, accounting and business advisory expertise throughout the Mid-Atlantic region from offices in Bethesda, MD and Washington, DC.
