Nationwide Block of Corporate Transparency Act

A federal judge in Texas entered an order blocking enforcement of the Corporate Transparency Act ("CTA") nationwide. Most importantly, the decision suspends, for now, the upcoming January 1, 2025, deadline for reporting companies to file Beneficial Ownership Information ("BOI") reports with FinCEN. Companies should be prepared to file their BOI reports on short notice, as the status of the enforceability of the Act could change quickly, with further court action or regulatory guidance.

Key points of the ruling

• Temporary relief: Entities are not currently required to comply with the CTA’s beneficial owner reporting requirements.

• Nationwide block: The Texas federal court’s decision prevents the government from enforcing the CTA until further notice.

• Ongoing legal challenges: The compliance and reporting requirements of the CTA remain subject to change as legal challenges continue.

What should be done next?

• Be prepared: While the CTA is currently blocked, it’s important to be ready for compliance and complete preparation if the court’s decision is overturned or modified.

• Stay informed: Keep up with the latest news and legal developments regarding the CTA. While we understand that companies may want to delay their CTA filings, it’s important to keep in mind that the government is likely to appeal this ruling. The court’s order could be lifted without much notice and companies may need to work quickly to complete their CTA filings by the original January 1, 2025, deadline.
• Consult experts: Work with legal and financial advisors to understand the potential impacts on your business and prepare for any future changes.

Please note, the Texas federal court order only affects the federal CTA. State laws that require similar reporting are not covered by the order. While the preliminary block of the CTA has temporarily halted its enforcement, providing businesses with a reprieve from immediate compliance requirements, the legal landscape is still evolving, and businesses must stay vigilant and prepared for any future developments.

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