Christina M. Reger, Esq. and Jacqui Hopkins

What? What does that mean to me?

Yesterday, with a little less than one month before the December 31 compliance deadline for filing your Beneficial Ownership Information (BOI) required by the Corporate Transparency Act, a federal district court in Texas issued a preliminary injunction that blocks the Department of Treasury from enforcing the reporting requirements under that statute. 

Again, what does that mean to me?

It means, you do not have to file your BOI. So, for all of you conspiracy theorists out there who haven’t filed yet, you are off the hook. 

But, what if I did file?

Well, you can’t “unfile.” No harm, no foul.  

Give me the details (I’m nerdy like that and want to know).

According to TheCorporateCounsel.net, this holding – Texas. Top. Cop. Shop. v¡. Garland (E.D. Tex.; 12/24) – follows an Alabama decision from earlier this year that also found the CTA unconstitutional. In the Alabama case, FinCEN followed up with a notice that clarified the court’s order applied only to the specific plaintiffs in that litigation. Here, though, the court was very clear that its order applies to all entities – on a nationwide basis. Here’s an excerpt from the opinion:

Having determined that Plaintiffs have carried their burden, the Court GRANTS Plaintiff’s Motion for a Preliminary Injunction. Therefore, the CTA, 31 U.S.C. § 5336 is hereby enjoined. Enforcement of the Reporting Rule, 31 C.F.R. 1010.380 is also hereby enjoined, and the compliance deadline is stayed under § 705 of the APA. Neither may be enforced, and reporting companies need not comply with the CTA’s January 1, 2025, BOI reporting deadline pending further order of the Court.

 We will keep you posted on any developments that impact your obligations.