With the January 1, 2025, filing deadline for Beneficial Ownership Information (BOI) Reports looming less than a month away, a Texas federal court issued a nationwide preliminary injunction against enforcement of the Corporate Transparency Act (CTA) on December 3, 2024.
Bloomberg Law reports that in its decision in the case (Texas Top Cop Shop, Inc., et al. v. Garland, et al., Case No. 4:24-cv-478 [E.D. Tex.]) the court found that the law is likely unconstitutional and that its enforcement could harm the companies subject to the CTA’s beneficial owner-reporting obligations.
The ruling will not be permanent until the case is decided and only if the court finds the CTA unconstitutional and issues a permanent injunction. Therefore the injunction is a temporary measure, and the government may take steps to appeal the court’s decision.
As a result of the ruling, no business will be required to file Beneficial Owner Information. However, there will likely be further litigation, so the decision could be overturned.
For now, reporting companies may consider the January 1 deadline to file BOI Reports temporarily suspended until another federal court overrules or narrows the Texas court’s injunction. If this happens the January 1 deadline could be reinstated and reporting companies would need to act quickly to comply.
The Andersen Firm will continue to monitor and keep you informed on these developments.
To read the full report from Bloomberg Law, click the link: Corporate Transparency Act Blocked Nationwide by Texas Court