On December 3, 2024, the U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction halting enforcement of the Corporate Transparency Act (the “CTA”) and its reporting requirements. See Texas Top Cop Shop, Inc., et al. v. Garland, et al., Case No. 4:24-cv-478 (E.D. Tex.). This ruling temporarily blocks the deadlines for companies to file reports with the U.S. Treasury Department's Financial Crimes Enforcement Network (“FinCEN”), which include details about the company and its beneficial owners.

The CTA requires reporting companies to file reports by January 1, 2025, if formed prior to 2024. If formed during 2024, the deadline is within 90 days of formation. If formed after 2024, the deadline is within 30 days of formation. However, the injunction temporarily prevents enforcement of these deadlines.

Many reporting companies that are in the process of filing or have not yet filed a report are seeking clarification on the impact of the preliminary injunction. As of December 4, 2024, the reporting requirements (including the reporting deadlines) are temporarily unenforceable. However, note that the injunction is not permanent, may be appealed and is subject to further legal developments. The timing and potential of an appeal, as well as its outcome, remain uncertain. 

Legal developments could occur quickly or without warning and any changes may or may not result in an extension of the CTA’s deadlines. Accordingly, reporting companies should proceed carefully and be prepared to file a report by the required deadline if the preliminary injunction is stayed or overturned on appeal. Reporting companies with complex capital structures or those needing to coordinate with third parties should strongly consider taking steps to prepare for filing.  

If you have any questions about CTA compliance in light of this injunction, please contact the GCT attorney with whom you work. GCT will continue to monitor developments and provide updates as they become available.