Corporate Transparency Act
IMPORTANT NATIONAL CTA STATUS UPDATE
On Dec. 3, the U.S. District Court for the Eastern District of Texas published a decision in the matter of Texas Top Cop Shop, Inc., et al. v. Garland, et al. issuing a preliminary nationwide injunction against the Corporate Transparency Act (Act). The court granted Plaintiff’s request for a preliminary injunction, blocking the U.S. Department of Treasury from enforcing the act’s beneficial ownership information (BOI) reporting requirements.
The court granted Plaintiff’s request for a preliminary injunction, blocking the U.S. Department of Treasury from enforcing the act’s beneficial ownership information reporting requirements.
In his opinion, Judge Amos L. Mazzant III grants the Plaintiff’s request to preliminary enjoin the Government from enforcing the Corporate Transparency Act and its Implementing Regulations, ruling that “Neither may be enforced, and reporting companies need not comply with the CTA’s January 1, 2025, BOI reporting deadline pending further order of the Court.”
This preliminary injunction applies nationwide, halting enforcement and compliance of the Act’s beneficial ownership reporting requirements across the entire United States. CAI’s legal team believes the injunction applies to all community associations incorporated within the U.S. Read more here: https://advocacy.caionline.org/corporate-transparency-act-blocked-nationwide-by-texas-federal-judge/
On Dec. 5, the Government appealed this ruling to the U.S. Court of Appeals for the Fifth Circuit. FinCEN issued guidance that “in light of a recent federal court order, reporting companies are not currently required to file beneficial ownership information with FinCEN and are not subject to liability if they fail to do so while the order remains in force. However, reporting companies may continue to voluntarily submit beneficial ownership information reports.”
This injunction is not a final ruling on the CTA's constitutionality. This is a time of uncertainty, and community associations should stay informed, vigilant, and be prepared to comply if the injunction is lifted or further legal developments occur.