On December 3, 2024, the United States District Court for the
Eastern District of Texas issued a preliminary injunction in
Texas Top Cop Shop, Inc. v. Garland, finding that the
Corporate Transparency Act ("CTA") was likely
unconstitutional (click here for our prior client
alert with more information about the CTA).
The trial court's order included a nationwide injunction that
bars enforcement of the CTA and effectively suspends all filing
deadlines and reporting requirements thereunder for all companies
in the United States indefinitely.
This means that companies do not have to comply with the CTA for
the time being. However, the Government has appealed the order, and
further action by the trial court or the Fifth Circuit Court of
Appeals could dissolve or modify the trial court's injunction,
in which case the CTA, and all associated reporting requirements,
may come back into effect with little advance notice.
Accordingly, although filing BOI reports is not currently legally
required, companies should nonetheless consider doing so in order
to not be caught off guard if this injunction is lifted and the CTA
goes back into effect at some point in the future. FinCEN has
stated that it will continue to accept voluntary BOI reports, while
also expressly acknowledging that companies are not under a legal
obligation to file reports while the Texas injunction remains in
effect.
In either case, all companies need to pay close attention to
developments with respect to this and other CTA litigation, as the
current injunction could be lifted or modified at any time. Please
regularly check our website and other sources of news, because
although we may post an update if this injunction is modified or
lifted, our firm cannot individually notify all prior and current
clients if the CTA goes back into effect.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
