On December 3, 2024, the U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction against the enforcement of the Corporate Transparency Act (CTA), questioning its constitutionality and its impact on small businesses. While this litigation is ongoing, reporting companies are not currently required to file their beneficial ownership information report (BOIR) with the Financial Crimes Enforcement Network (FinCEN) and will not be subject to liability if they fail to do so while the preliminary injunction remains in effect. However, reporting companies may continue to voluntarily submit BOIRs.

Reporting companies should understand that the Court’s ruling is only preliminary and may change upon further court proceedings. The Department of Justice, on behalf of the Department of the Treasury, filed a Notice of Appeal on December 5, 2024.

While the injunction provides temporary relief, business owners should still be prepared to file their reports in case the preliminary injunction is overturned, or other actions reinstate the enforceability of the CTA.

Lear & Pannepacker will continue to monitor for any developments and provide updates. If you have any questions regarding the BOIR and how it affects your business, please do not hesitate to contact us at Lear & Pannepacker.