Nationwide Injunction Halts Enforcement of Corporate Transparency Act

Following Monday’s reminder email about the approaching deadlines for the Corporate Transparency Act (CTA), news broke late yesterday that the U.S. District Court for the Eastern District of Texas issued a nationwide injunction halting the enforcement of CTA.

The lengthy opinion from the court concludes, among other things, that the CTA is likely unconstitutional and the “extent of the constitutional violation Plaintiffs have shown is best served through a nationwide injunction.” The Court further ruled that the Government should be enjoined from enforcing the Reporting Rule and the January 1, 2025 compliance deadline under the Reporting Rule should be stayed. Thus, companies do not need to comply with the CTA’s January 1, 2025 reporting deadline at this time.

The injunction is a preliminary injunction, not a permanent injunction, and therefore not a final decision. It remains uncertain whether the injunction will be upheld or if the deadlines will be reinstated. However, as of now, it appears that all entities subject to the CTA reporting requirements have been granted a temporary relief from the CTA. We will continue to monitor developments and will advise appropriately.

If you would like to discuss these reporting requirements or have any questions about the CTA or its filing requirements, please feel free to contact your trusted Rosenberg & Estis, P.C. attorney or William R. Byers, Member of the firm’s Transactional Department, who authored the above on CTA.