On December 3, 2024, the US District Court for the Eastern District of Texas, in Texas Top Cop Shop, Inc. v. Garland, No. 4:24-CV-478, issued a preliminary injunction enjoining the United States Government’s enforcement of the Corporate Transparency Act (the “CTA”) and its implementing rules and regulations and staying the impending filing deadline. The United States Government has already appealed the decision to the Fifth Circuit Court of Appeals.

The CTA requires certain non-exempt companies (known as “Reporting Companies”) to file a report (known as the “Beneficial Ownership Information Report” or “BOIR”) with the Financial Crimes Enforcement Network of the United States Department of Treasury disclosing information about the company and its “Beneficial Owners.” Any Reporting Company in existence prior to January 1, 2024 was required to file the BOIR prior to January 1, 2025, while Reporting Companies formed in 2024 had to file the BOIR within 90 days of formation.

The preliminary injunction issued by the court means that Reporting Companies will not be required to file the BOIR so long as the injunction is in place. The court’s decision is temporary until a final decision can be made regarding the constitutionality of the CTA.

For Reporting Companies that have already filed their BOIR, no further action is necessary at this time.

Any Reporting Companies that have not filed their BOIR are not required to during the time of the injunction. There is no indication of how long the preliminary injunction will last so Reporting Companies who have not filed their BOIR should monitor this situation closely and prepare all information necessary for filing in the event the injunction is lifted and the impending filing deadline is reinstated.

Please monitor our website for updates regarding the injunction and the CTA.