A Texas federal judge has issued a nationwide injunction halting the enforcement of the Corporate Transparency Act (CTA), which was set to require businesses to disclose their beneficial owners to the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN). The December 3, 2024 ruling prohibits the CTA’s application nationwide, asserting that the law is likely unconstitutional.
This ruling prevents entities from having to comply with reporting requirements by January 1, 2025, unless the decision is overturned. This injunction is particularly significant because it applies to the entire country, unlike a previous ruling in Alabama, which only blocked enforcement within that state. Businesses now have to decide whether to comply with the CTA’s provisions or delay their filing, pending the outcome of an appeal.
Given the timing of the ruling, companies have two options: (1) comply with the CTA’s filing requirements and avoid missing the deadline in case the injunction is lifted or changed; or (2) wait, but continue gathering the necessary data to comply once the legal situation is further clarified. Businesses formed or registered in the U.S. after January 1, 2024, have 90 days to file, while those formed or registered in 2025 must do so within 30 days.
An appeal of the ruling is anticipated, and if successful, businesses may have to submit reports compliant under the original CTA timeline. For those that have already filed, not further action is needed at this time. Those that have not filed yet should continue for legal updates on the matter.
For additional updates and guidance, please reach out to our firm to help guide you through the nuances of the CTA and ongoing litigation.
Revolution Law Group is located in Greensboro, NC, and serves individuals and small businesses throughout the Triad and surrounding areas. To contact us please visit Revolution.law or call 336-333-7907.
The information included here is for informational purposes only, is not exhaustive of all considerations when creating documents, is not intended to be legal advice, and should not be relied upon for that purpose. We strongly recommend you consult with an attorney and do not attempt to create your own documents.