On December 3, Judge Amos Mazzant of the U.S. District Court for the Eastern District of Texas granted a nationwide preliminary injunction enjoining enforcement of the Corporate Transparency Act (CTA) and its implementing regulations and staying the compliance deadline for filing beneficial ownership information reports in Texas Top Cop Shop, Inc. v. Garland. Following the Court's order, reporting companies need not comply with the CTA's January 1, 2025, reporting deadline and – presently – do not need to file beneficial ownership information reports with the Financial Crimes Enforcement Network of the Department of the Treasury (FinCEN).
The preliminary injunction is not a final decision. While the Court's order pauses nationwide enforcement of the CTA, a final determination of the enforceability of the CTA remains uncertain and reporting companies should remain vigilant and be prepared to comply with the CTA's reporting requirements at a moment's notice.
Phelps will continue monitoring developments related to the CTA and its implementing regulations. In the meantime, we suggest reporting companies remain prepared to comply with the CTA's reporting requirements if the preliminary injunction is overturned or otherwise modified.
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