*This article is an update to the previous versions:
- The Corporate Transparency Act (Updated on 12/9/2024)
- The Corporate Transparency Act (Updated on 12/4/2024)
- The Corporate Transparency Act (Updated on 8/26/2024)
- The Corporate Transparency Act (Updated on 2/1/2024)
U.S. DISTRICT COURT DENIES GOVERNMENT’S MOTION TO STAY PRELIMINARY INJUNCTION OF THE CORPORATE TRANSPARENCY ACT
On December 17, 2024, the U.S. District Court for the Eastern District of Texas denied the Government’s Motion to Stay Preliminary Injunction Pending Appeal of the December 3, 2024 decision in Texas Top Cop Shop, Inc., et al. v. Garland, et al. which imposed a preliminary nationwide injunction against the Corporate Transparency Act (Act).
In making its decision, the Court noted when Congress enacted the Act almost five years ago, the Act had no implementation date, so there is no compelling need to lift the stay, especially where the Court has found the statute to likely be unconstitutional.
The Court also cited FinCEN’s recent website alert announcing a stay on the January 1, 2025, beneficial ownership information (“BOI”) reporting deadline pending determination of the appeal. Due to the widespread media coverage of FINCEN’s alert, the Court concluded lifting the stay would add to, not alleviate, public confusion about the Act.
In conclusion, the Court’s decision means the December 3, 2024 injunction remains in effect until the Fifth Circuit Court of Appeal rules otherwise. However, it is important to remember the order is still a preliminary injunction only. While it temporarily pauses enforcement of the Act on a nationwide basis, enforcement could resume if the injunction is later reversed.
For additional information and updates on the Texas Top Cop Shop case appeal and its applicability to the Act visit www.caionline.org/CTA.