As a result of a Texas federal court decision handed down on December 3, 2024, a preliminary injunction is now in place against enforcing the Corporate Transparency Act. While this is not likely to be a final stop in the courts for this decision, it does provide a reprieve on filing.

Background:

  • Prior to this injunction, existing companies formed before January 1, 2024, had until January 1, 2025, to file Beneficial Ownership Information. New companies formed on or after January 1, 2024, had 90 days from creation/registration to file (30 days for companies created on or after January 1, 2025).
  • The federal court determined that, "reporting companies need not comply with the CTA's January 1, 2025, BOI reporting deadline pending further order of the Court."


What this means:

  • As this is a preliminary injunction, the case may be appealed or lifted in the coming months.
  • If you have not already filed, you are not required to do so at this point. Businesses should carefully evaluate next steps regarding compliance, particularly with a new administration coming into place leaving some uncertainty as to whether or not this injunction will be upheld.
  • Businesses who have already filed with FinCEN should monitor developments as they unfold, and can rely on our team to monitor and advise on any updates.
  • At the moment, the above-mentioned deadlines are no longer in effect. It is unlikely that there will be additional court decisions prior to year-end, but in the event that does happen we will advise accordingly and businesses who have not filed should be prepared to act swiftly.


What's next:

  • As we await further guidance, businesses can opt to hold off on filing.
  • It is likely that this case will be appealed and could go as far as the Supreme Court.
  • The best approach is to monitor the case and be prepared to file in the event the Texas decision is overturned.
  • As a reminder, there are many options for filing including DIY, legal counsel, CPA guidance, and online sources. We recommend having a plan in place with one of the above so you are prepared to file in the event you need to do so.


As always, please feel free to reach out to your HLBGC advisor or email us at cta@grosscollins.com with any questions.