Federal Court Temporarily Pauses Enforcement
On December 3, 2024, a U.S. District Court Judge in Texas Top Cop Shop, Inc., et. al. v. Garland et. al. granted the plaintiff’s motion for preliminary injunction to enjoin the government from enforcing the Corporate Transparency Act (“CTA”) while the case is litigated. This injunction stops the government from enforcing the Beneficial Ownership Information Reporting compliance deadline of January 1, 2025, or any other enforcement of the CTA. The Judge ruled that “interpretation of the Constitution is an area where Congress enjoys no authority.” The Court concluded by stating “[t]he CTA is likely unconstitutional as outside of Congress’s power” and granted the injunction “pending further order of the Court.” The preliminary injunction is a temporary measure, which can be reversed, but indicates this Court thinks the plaintiffs in the case have a substantial likelihood of success on the merits.
We Recommend...
Given this ruling, we recommend businesses postpone filing their Beneficial Ownership Information (“BOI”) Reports if they have not already filed. However, businesses should gather all information required to file and be prepared to file in the event the nationwide temporary injunction barring enforcement is lifted. Businesses may file their BOI Reports during the injunctive period if they choose to do so.
We Will Continue to Monitor Developments
We will continue to monitor developments regarding the CTA and provide updates as they occur. Please feel free to contact us if you would like assistance in evaluating your company’s CTA compliance requirements. The information in this article is informational in nature and should not be taken as formal legal advice. You should consult an attorney for advice regarding your individual situation.
The information you obtain at this site should not be taken as formal legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us and welcome your calls, letters and electronic mail. Please do not send any confidential information to us until such time as an attorney-client relationship has been established.
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