Texas Federal Court Issued a Nationwide Injunction on the Implementation of the Corporate Transparency Act (CTA)

?? An important update on the beneficial ownership information (BOI) reporting rules, a new requirement for U.S. companies to report about their ultimate beneficial owners to the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) by January 1, 2025.???

As of Tuesday, December 3, 2024, a federal court in Texas issued a nationwide injunction that blocks the implementation of the Corporate Transparency Act (CTA) and its regulations, determining that the Act is unconstitutional. ?“Reporting companies need not comply with the CTA’s January 1, 2025, BOI reporting deadline pending further?order of the Court."?Additional litigation regarding this case is anticipated, with the case likely moving to higher appellate courts in the coming weeks, creating additional uncertainty about the law’s future enforceability.??

As we await further guidance, companies have a few options on how to proceed.

1. File the BOI reports regardless of the injunction to avoid future penalties should the law be reinstated (our recommended approach).

2. Have the BOI reports ready but hold on submitting until further guidance is issued.

3. Hold on preparing the BOI reports under the assumption that the injunction will hold.

For our existing clients: Please consider these options and inform us of your decision as soon as possible.?

Companies should stay vigilant as further developments unfold. ?We are committed to keeping our clients informed and will continue to provide you with updates as legislation proceeds.

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