Corporate Transparency Act Blocked Nationwide by Texas Court

On Tuesday, December 3, 2024, a Texas federal judge granted a preliminary injunction halting the continuing implementation of the Corporate Transparency Act (CTA) and its beneficial ownership information (BOI) reporting requirements.

The court stated that (1) companies are not required to comply with the CTA’s January 1, 2025, BOI reporting deadline, and (2) the CTA and its implementing rules may not be enforced.

The court’s order is a preliminary injunction and not a final order. We expect the government may appeal the ruling and request a stay of the order. The court’s order temporarily pauses enforcement of the CTA on a nationwide basis, but enforcement may resume if the court’s order is overturned on appeal or the United States ultimately prevails on the merits.

Because it is uncertain at this time whether the order will be upheld, it would be prudent for reporting companies that have not filed to date to continue preparing to file in anticipation of a successful challenge by the government. In the event of a successful challenge, filing agents may be overwhelmed with filing requests and clients should be prepared to submit the BOI report to FinCEN directly.

If you have questions about the ruling or would like us to assist with your BOI submission, please contact us at CTA@coblentzlaw.com.