Important Update: Corporate Transparency Act & Beneficial Ownership Filings

In January 2024, we wrote a blog post regarding the Corporate Transparency Act (CTA) and its reporting requirements. The CTA would have required many businesses—including corporations, limited liability companies, and other entities created by state filings—to report information about their beneficial owners to the Financial Crimes Enforcement Network (FinCEN).

On December 3, 2024, the U.S. District Court for the Eastern District of Texas issued a preliminary injunction that blocks the enforcement of the Corporate Transparency Act nationwide. This injunction means that the reporting requirements we outlined in our January 2024 letter are temporarily suspended across the United States.

While this injunction provides temporary relief from the reporting requirements, it is important to note that:

1.  The injunction is preliminary and may be modified or lifted as legal proceedings continue;
2.  The federal government may appeal this decision; and
3.  The underlying law remains in place, even though enforcement is currently suspended.

While the plaintiffs in the Texas case may ultimately succeed in having the law struck down or modified, WE RECOMMEND THAT AFFECTED BUSINESSES PAUSE ANY IMMEDIATE BENEFICIAL OWNERSHIP REPORTING WHILE MAINTAINING RECORDS OF THE INFORMATION THAT WAS BEING GATHERED FOR COMPLIANCE. The information we provided in our previous blog article remains a valuable resource for understanding what may ultimately be required of the injunction is lifted or modified.

It is prudent to stay prepared for potential future compliance requirements while monitoring these legal developments. Our office will continue to track this situation closely and provide updates as significant changes occur.

For specific questions about how this injunction affects your business obligations, please contact our office to schedule a consultation.