What is Happening with the Corporate Transparency Act (CTA) ?

On Tuesday, December 3, 2024, the U.S. District Court for the Eastern District of Texas granted a nationwide preliminary injunction suspending enforcement of the Corporate Transparency Act (CTA), relieving entities of the obligation to file the beneficial ownership information reports (BOI reports).  The nationwide injunction occurred only a few weeks before the January 1, 2025 compliance date.  The court also stayed the deadline.  

The Texas court has not yet made a final determination on the constitutionality of CTA – only that it is likely unconstitutional.  Regardless, many expect an appeal by the government but do not anticipate any resolution of the issues this year. 

What should I be doing while the Texas court determines the constitutionality?

As the Texas case progresses, we recommend monitoring the status of the Texas case and gathering necessary information for BOI reports (including any updates to information in previously filed BOI reports) in the event the injunction is lifted or the decision reversed or vacated.  It is unknown how quickly BOI reports will need to be filed in the future if compliance obligations are reinstated under CTA.

Can I continue filing my BOI reports?

Yes, you may continue to file your BOI reports.  At this time, the FinCen filing website continues to be operational and accepting filings.  FinCen has not yet formally addressed the nationwide injunction.  Before proceeding with any BOI filings, you may also wait and see what happens with the Texas case as well as various other cases filed throughout the United States. 

For further background information on the CTA please see our previously published articles – The Corporate Transparency Act – What You Need to Know Now and Your Health Care Organization Could Be Subject to the Corporate Transparency Act (CTA).

The contents of this Client Alert are for informational purposes only and do not constitute legal advice. If you have any questions or want to engage our Firm to provide CTA compliance services, please contact a Baird Holm attorney.