December 04, 2024 | Corporate

Important Update on the Corporate Transparency Act Injunction

By Brooke M. Pollard, Esq.

On December 3, 2024, the District Court for the Eastern District of Texas issued a nationwide preliminary injunction halting enforcement of the Corporate Transparency Act (CTA) and its implementing regulations. This injunction temporarily suspends the requirement for Reporting Companies to file Beneficial Ownership Information (BOI) Reports before the January 1, 2025, deadline.

What Does This Mean for You?

Filings are temporarily paused. The current injunction means there is no immediate obligation to comply with the CTA’s reporting requirements.

The future remains uncertain. The decision could be reversed, upheld, or modified by the Federal Appellate Court or the Supreme Court. If the injunction is overturned, compliance deadlines may be reinstated with limited notice.

FAQs:

Do I still need to file? While the injunction is in effect, you are not required to file. However, you can still file voluntarily if you wish to ensure compliance and avoid potential last-minute complications should the requirements be reinstated.
Is it too late to file? No, filings are still being accepted, and filing now may help you avoid a rush later if the stay is lifted.
Should I hold off? That decision is ultimately yours, but many clients are preparing and even filing their BOI reports now to stay ahead of any potential reinstatement.
Will I never have to file?It’s too early to tell. Legal challenges may delay the CTA’s implementation, but they are unlikely to eliminate it entirely.

Our Recommendation

While you are not required to file BOI reports at this time, we believe it is prudent to proceed as if compliance will eventually be necessary. Preparing now can save you time and resources, particularly if the injunction is lifted with little notice. Additionally, failing to comply once the requirements are reinstated can result in significant civil and criminal penalties.

If you have questions or would like assistance preparing for compliance, please feel free to let me know.

Get in touch: