Chicago Business Attorney Blog
Corporate Transparency Act
In a significant development, a Texas federal district court has issued a nationwide injunction temporarily blocking enforcement of the Corporate Transparency Act (CTA). This decision, handed down on December 3 in Texas Top Cop Shop, Inc. v. Merrick Garland (Case No. 4:24-cv-478), deems the CTA and its implementing rules likely unconstitutional.
Key Takeaways:
- Injunction Details: The court has enjoined both the CTA and the Financial Crimes Enforcement Network’s (FinCEN) final rule, halting enforcement and pausing the January 1, 2025, compliance deadline. Reporting companies are not currently required to file beneficial ownership reports.
- Reasoning: The court found a nationwide injunction appropriate, citing the likelihood of constitutional issues with the CTA and its rules.
- Next Steps: The federal government is expected to appeal the ruling and may seek to narrow the scope of the injunction or reinstate the compliance deadline.
What This Means for Your Business
For now, businesses are not required to comply with the CTA’s reporting obligations. However, this is a temporary reprieve. The situation remains fluid, and the final outcome is uncertain.
Our Advice
We recommend holding off on filing your beneficial ownership report under the CTA until further clarity emerges. We are closely monitoring developments in the Texas Top Cop Shop case and will keep you informed with timely updates.
Stay Tuned
As legal challenges continue, it’s critical to stay ahead of potential compliance requirements. Subscribe to our updates or contact us for tailored guidance.