A federal court in Texas just issued a nationwide injunction halting the implementation of the Corporate Transparency Act’s (CTA) beneficial ownership reporting requirements. Therefore, unless and until an appellate court overrules or narrows the injunction, no businesses are obligated to comply with the reporting requirements.
The Texas court halted the implementation of the CTA beneficial ownership reporting requirements, holding that the CTA is likely unconstitutional. It issued a preliminary injunction barring the government from enforcing the CTA and its reporting requirements against anyone.
This is important since prior to the ruling, small businesses that met certain criteria would have had to file reports with the Department of the Treasury by January 1, 2025, or risk fines and criminal penalties.
As it stands now, the preliminary relief will remain in effect until the conclusion of legal proceedings, at which point the court may enter a permanent injunction. In the meantime, the government will likely appeal the preliminary injunction.
Cardinal will keep our members updated on the status of the CTA matter.