Corporate Transparency Act halted

by Abbygale Martinen Dow And Mark Ventola, Sheehan Phinney Bass & Green PA

A federal judge in Texas has instituted a nationwide injunction, halting the enforcement of the Corporate Transparency Act (CTA) and its associated reporting rule, which required “reporting companies” to submit reports to the Financial Crimes Enforcement Network (FinCEN) detailing the identity of each beneficial owner of the reporting company by January 1, 2025.

In Texas Top Cop Shop, Inc., et al., v. Merrick Garland, Attorney General of the United States, et al., the plaintiffs challenged the constitutionality of the CTA. On December 3, 2024, the presiding judge issued a preliminary injunction, stopping the enforcement of the CTA and finding that the plaintiffs had demonstrated the necessary requirements for a preliminary injunction.

What this means for businesses

The January 1, 2025, compliance deadline for the required reporting under the CTA has been stayed (put on hold), and currently businesses do not need to submit their beneficial owner reports until further notice.