The upcoming January 1, 2025 deadline to file the Beneficial Ownership Reports (“BOIs”), which had been required under the Corporate Transparency Act (“CTA”), has been suspended.
On Tuesday, December 3, 2024, the U.S. District Court for the Eastern District of Texas, in a ruling that applies across the country, issued a nationwide preliminary injunction suspending enforcement of the CTA and its reporting requirements, effective immediately. This means that there is no further requirement to file the BOIs. A copy of the order can be found here – texas-top-cop-shop-inc-et-al-v-garland-et-al.
As we have covered in prior emails and posts, the CTA has imposed federal reporting and disclosure requirements on most privately owned businesses/companies. The looming deadline of January 1, 2025, applied to all companies that were formed prior to January 1, 2024. That deadline is now suspended, along with all other filing requirements under the CTA.
Here are some words from the court order:
“In the matter before the Court, Plaintiffs challenge an unprecedented law known as the Corporate Transparency Act (“CTA”). It represents Congress’s attempt to combat bad actors’ ability to cloak their criminal activities in a veil of corporate anonymity. At its most rudimentary level, the CTA regulates companies that are registered to do business under a State’s laws and requires those companies to report their ownership, including detailed, personal information about their owners, to the Federal Government on pain of severe penalties. Though seemingly benign, this federal mandate marks a drastic two-fold departure from history. First, it represents a Federal attempt to monitor companies created under state law—a matter our federalist system has left almost exclusively to the several States. Second, the CTA ends a feature of corporate formation as designed by various States—anonymity. For good reason, Plaintiffs fear this flanking, quasi-Orwellian statute and its implications on our dual system of government. As a result, Plaintiffs contend that the CTA violates the promises our Constitution makes to the People and the States. Despite attempting to reconcile the CTA with the Constitution at every turn, the Government is unable to provide the Court with any tenable theory that the CTA falls within Congress’s power. And even in the face of the deference the Court must give Congress, the CTA appears likely unconstitutional.”
DISCLAIMER: The information provided above is for informational purposes only, is general in nature, and is not meant to be an exhaustive list of all reporting requirements under the CTA. It does not constitute legal advice and should not be interpreted or relied on as such. For legal advice tailored to your specific circumstance, please reach out to one of our qualified attorneys.