Corporate Transparency Act Breaking News

On December 2, 2024, a federal court in Texas issued a nationwide injunction halting the implementation of the Corporate Transparency Act’s (CTA) beneficial ownership reporting requirements. Therefore, unless and until an appellate court overrules or narrows the injunction, no businesses are obligated to comply with the reporting requirements.

See below for more information.

DEVELOPMENTS THAT MATTER

Judge Blocks Federal Ownership Reporting Requirements
A federal court in Texas halted the implementation of the Corporate Transparency Act’s (CTA) beneficial ownership reporting requirements. Holding that the CTA is likely unconstitutional, the court issued a preliminary injunction barring the government from enforcing the CTA and its reporting requirements against anyone. 

‌Why it matters: Prior to the ruling, small businesses that met certain criteria would have had to file reports with the Department of the Treasury by January 1, 2025, or risk fines and criminal penalties.

‌Looking ahead: The preliminary relief will remain in effect until the conclusion of legal proceedings, at which point the court may enter a permanent injunction. In the meantime, the government will likely appeal the preliminary injunction. 

‌Bottom line: Unless and until an appellate court overrules or narrows the injunction, no businesses are obligated to comply with the reporting requirements.

‌Learn more: What Every Small Business Needs to Know About the Corporate Transparency Act