On Tuesday (12/3/2024), the U.S. District Court for the Eastern District of Texas granted a preliminary injunction enjoining enforcement of the Corporate Transparency Act (31 U.S.C. § 5336), the underlying beneficial owner reporting rule (31 C.F.R. 1010.380), and stayed the January 1, 2025 compliance deadline to file beneficial owner reports.[1] The scope of the injunction is nationwide, unlike the injunction issued in the NSBU v. Yellen case by the Northern District of Alabama earlier this year.[2]
Notably, the Texas court stayed the reporting deadline with respect to “reporting companies” formed prior to January 1, 2024. However, the Texas court did not expressly stay or otherwise address the reporting deadline for “reporting companies” formed on or after January 1, 2024 (although enforcement of the CTA appears to be enjoined for now). Hopefully, the Texas court will address this uncertainty regarding the filing deadline for more recently formed entities soon.
If you need assistance in assessing your business’s responsibilities under the CTA, please contact Andrew Hazen (ahazen@fh2.com; 770-771-6818) or visit fh2.com to learn more about how the attorneys at Friend, Hudak & Harris, LLP can help.
[1] See Texas Top Cop Shop, Inc., et al. v. Garland, et al., No. 4:24-cv-478 (E.D. Tex.).
[2] See National Small Business United v. Yellen, No. 5:22-cv-01448 (N.D. Ala.).
