Corporate Transparency Act Enforcement suspended nationwide

The U.S. District Court for the Eastern District of Texas granted a nationwide temporary injunction on Dec. 3 suspending enforcement of the Corporate Transparency Act (CTA) and its Beneficial Ownership Information (BOI) reporting rule.

The injunction effectively suspends the requirement under the CTA for reporting companies to disclose their beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN). The court ruled that “reporting companies need not comply with the CTA’s January 1, 2025, BOI reporting deadline pending further order of the Court.” The basis for the court’s ruling is a determination the CTA is likely unconstitutional.

The injunction applies nationwide, providing all businesses subject to the CTA’s reporting requirements are relieved of their CTA filing obligations until further notice. For companies created prior to 2024, the ruling suspends their obligation to submit their initial BOI reports to FinCEN before the Jan. 1 deadline. For companies created in 2024, this suspends their obligation to report within 90 days of formation. While this litigation is ongoing, FinCEN will comply with the order issued by the U.S. District Court for the Eastern District of Texas for as long as it remains in effect. Reporting companies may continue to voluntarily submit BOI reports.

Businesses should remain cautious and continue to monitor reporting obligations. The district court’s injunction is preliminary. The Department of Justice, on behalf of the Department of the Treasury, filed a Notice of Appeal on Dec. 5. If compliance requirements are reinstated, there is no assurance whether or how the prior reporting deadlines may be extended. Reporting companies should also stay tuned for updates or guidance from FinCEN, which may clarify the agency’s intended next steps in light of the Court’s ruling.

Markham Norton Mosteller Wright & Co. is a member of PrimeGlobal, a worldwide association of independent accounting firms. Contact the Fort Myers office at (239) 433-5554 and the Naples officer at (239) 261-5554.