US Court Issues Nationwide Injunction Halting Corporate Transparency Act
A federal court in Texas has enjoined the Corporate Transparency Act, suspending beneficial ownership reporting requirements nationwide while the government's appeal is pending.
A U.S. District Court for the Eastern District of Texas has issued a nationwide preliminary injunction, effective December 3, 2024, that halts enforcement of the Corporate Transparency Act (CTA). The order suspends the beneficial ownership information (BOI) reporting requirements and stays all compliance deadlines for as long as the injunction remains in effect. This development provides immediate, albeit potentially temporary, relief for millions of companies from a significant new compliance burden. The Financial Crimes Enforcement Network (FinCEN), the agency responsible for implementing the CTA, has announced that it will comply with the court's order. Reporting companies are therefore not currently required to submit BOI reports and will not face penalties for non-compliance while the injunction is active. The Department of Justice, however, filed a notice of appeal on December 5, 2024, making the long-term status of the reporting regime uncertain. Counsel should advise clients to monitor the appeal closely, as the reporting obligations could be reinstated.