On December 3, 2024, the US District Court for the Eastern District of Texas (the Court) found that the Corporate Transparency Act (CTA) is likely unconstitutional and issued a nationwide preliminary injunction prohibiting enforcement of the law until further notice. Moreover, the Court enjoined FinCEN's regulation promulgated at 31 C.F.R. § 1010.380, and ordered that the compliance deadline is stayed under the Administrative Procedures Act. For as long as the injunction is in effect, there is no obligation to report beneficial ownership information (BOI) to FinCEN under the CTA, including BOI reports that would otherwise be due by January 1, 2025. As of the date of this alert, neither FinCEN nor the US Department of Justice (DOJ) have announced whether they intend to appeal the order. We note that this latest ruling follows the DOJ's pending appeal with the 11th Circuit Court of Appeals regarding the constitutionality of the CTA after the District Court for the Northern District of Alabama ruled the CTA unconstitutional earlier this year
The injunction issued on December 3, 2024 is a preliminary measure, and further legal proceedings may alter this order or impact the enforcement of the CTA. We are closely monitoring the situation and will provide further updates as new information becomes available.
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