Corporate Transparency Act Compliance Update: Court Suspends Enforcement of CTA

Phoenix (December 6, 2024) – On December 3, 2024, in the case of Texas Top Cop Shop, Inc., et al. v. Merrick Garland, et al., the United States District Court for the Eastern District of Texas entered a nationwide preliminary injunction which enjoined the Corporate Transparency Act (CTA) along with enforcement of the Reporting Rule issued under the CTA.  The Court stayed the compliance deadline of January 1, 2025, for filing a Beneficial Ownership Information Report (“BOIR”), and ruled that reporting companies need not comply with that deadline pending further order of the Court.

As a preliminary injunction, the Order is subject to being vacated by the Court.  It is likewise subject to appeal by the Department of Justice, which could occur prior to the January 1, 2025 reporting deadline.  The injunction does not prohibit voluntary compliance with the CTA.  If a company which would be required to file a BOIR chooses not to do so in reliance on the preliminary injunction, it may nonetheless take steps to be prepared to file a BOIR on short notice in the event the preliminary injunction is vacated or overturned on appeal.  In the meantime, any company which chooses not to file should continue to monitor developments with respect to the injunction and any appeal the government may file.

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Jennings Haug Keleher McLeod expands by adding the talented lawyers of Waterfall, Economidis, Caldwell, Hanshaw & Villamana. Now with offices in Albuquerque, New Mexico as well as Phoenix and Tucson, Arizona, the Firm will continue to serve its clients across the Southwest under the name Jennings Haug Keleher McLeod Waterfall LLP.