Texas Federal Court Blocks Corporate Transparency Act’s BOI Reporting with Nationwide Injunction

Important Update: Texas Federal Court Blocks Corporate Transparency Act’s BOI Reporting with Nationwide Injunction

The Corporate Transparency Act’s Beneficial Ownership Reporting was temporarily blocked by a Texas federal court weeks before its compliance deadline.

The motion was granted by the U.S. District Court for the Eastern District of Texas. The lawsuit cited constitutional concerns. In the meantime, the ruling enacted the injunction and stated that “reporting companies need not comply with the CTA’s January 1, 2025, BOI reporting deadline pending further order of the Court.”

Texas Top Cop Shop v. Garland et al. (E.D. Tex., No. 4:24-cv-00478)

The BOI Reporting required corporations, limited liability companies, and partnerships to report certain information regarding their beneficial owners to the U.S. Treasury’s Financial Crimes Enforcement Network (“FinCEN”). The reporting requirements are intended to help prevent and combat money laundering, terrorist financing, and other illicit activity. The CTA impacts millions of U.S. businesses and comes with some serious repercussions for non-compliance.

What does this mean for you?

For now, BOI reporting requirements are on hold.  While this injunction is in effect, there are three potential outcomes:

1. Filing requirements will be permanently removed,
2. the filings may be delayed, but compliance requirements reinstated, or
3. the current injunction is lifted, and filing requirements are due by the original deadline of January 1, 2025

If you have already filed, you are compliant with the current law based on the time you filed.  If you have not filed, we advise waiting until further information is released.

Eccezion will continue to monitor developments and provide updates as they arise.