On December 3, 2024, Judge Amos Mazzant of the Eastern District of Texas issued a nationwide preliminary injunction concerning the Corporate Transparency Act (CTA), enjoining enforcement of the CTA as well as the implementing Treasury regulations, and staying the January 1, 2025 reporting deadline until further order of the Court. In the injunction, the Court found that the CTA and the regulations implementing it are likely unconstitutional and beyond the bounds of Congress’ commerce clause power.
Given this ruling, there is currently no requirement that entities subject to the CTA’s beneficial ownership reporting obligations with respect to formations prior to January 1, 2024 comply with the January 1, 2025 FINCEN beneficial ownership reporting deadline. Further, it is our view that the order also enjoins enforcement of CTA filing requirements with respect to entities formed after January 1, 2024. FINCEN has not yet responded to the decision and we will monitor any responses they have.
Entities may still voluntarily comply with the CTA. If you choose to pause any CTA filings, you should still be gathering information on your beneficial ownership. If the order is reversed, you may be required to comply on a shortened timeframe.
If you would like to move forward with your beneficial ownership reports, please reach out to us to discuss.
This is a dynamic situation, and Sadis will continue to update our clients on their CTA obligations in a timely manner.
