On December 3, 2024, the U.S. District Court for the Eastern District of Texas issued a preliminary injunction in the case of Texas Top Cop Shop, Inc. v. Garland, temporarily halting enforcement of the Corporate Transparency Act (CTA). CTA requires certain companies to submit Beneficial Ownership Information (BOI) reports to the Financial Crimes Enforcement Network (FinCEN).
The ruling has a nationwide effect, preventing enforcement of the CTA against all reporting companies across the United States, not just the named plaintiffs. The injunction suspends the BOI compliance deadlines until further notice.
This is a preliminary decision. On December 5, the government appealed the ruling to the Fifth Circuit Court of Appeals.
What Does This Mean for Your Business?
No Immediate Filing Obligation
Companies subject to the CTA’s reporting requirements are temporarily relieved of their obligation to file BOI reports.
Compliance Deadlines Suspended
Businesses formed before 2024 no longer need to meet the original January 1, 2025, filing deadline.
Businesses formed in 2024 are no longer required to file reports within 90 days of formation.
The Injunction is Temporary
This ruling is a preliminary injunction and does not permanently eliminate the CTA. The government has already appealed the district court’s order, which means the injunction could be stayed, modified, or overturned. If that occurs, the original reporting deadlines could be reinstated absent relief from FinCEN or the courts.
Be Prepared for Potential Reinstatement
We recommend that businesses gather necessary BOI information and be ready to file in the event that the injunction is lifted.
Optional Filing is Permitted
Companies that prefer to proceed with filing their BOI reports despite the suspension may still do so. FinCEN’s system remains active and is accepting filings.
We will continue to monitor developments in this case and provide updates in the coming days.
