*This article is an update to the previous versions:
- The Corporate Transparency Act (Updated on 8/26/2024)
- The Corporate Transparency Act (Updated on 2/1/2024)
TEXAS FEDERAL COURT ENJOINS ENFORCEMENT OF THE CORPORATE TRANSPARENCY ACT
On December 3, 2024, the U.S. District Court for the Eastern District of Texas published a decision in the matter of Texas Top Cop Shop, Inc., et al. v. Garland, et al. issuing a preliminary nationwide injunction against the Corporate Transparency Act (Act).
The court granted Plaintiff’s request for a preliminary injunction, blocking the U.S. Department of Treasury from enforcing the Act or its beneficial ownership information (BOI) reporting requirements, ruling “Neither may be enforced, and reporting companies need not comply with the CTA’s January 1, 2025, BOI reporting deadline pending further order of the Court.”
On December 4, 2024, the Community Association Institute (CAI) stated the court’s preliminary injunction applies nationwide, halting enforcement and compliance of the Act’s beneficial ownership reporting requirements across the entire United States. Notably, CAI’s legal team stated it believes the injunction applies to all common interest developments incorporated in the United States.
The court’s order is 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. As of this writing the federal government has not issued a public statement so it is unclear if it intends to appeal the court’s decision.
For additional information about the Texas Top Cop Shop case and its applicability to the Act visit www.caionline.org/CTA.