Federal Court in Texas Suspends BOI Reporting Requirements Under Corporate Transparency Act
The January 1, 2025, Corporate Transparency Act (CTA) reporting deadline has been halted. At this time, businesses are no longer required to comply with these federal reporting obligations.
On December 3, 2024, a federal court in Texas issued a preliminary injunction suspending the enforcement of the Corporate Transparency Act. The Act required businesses to report beneficial ownership information (BOI) to the Financial Crimes Enforcement Network (FinCEN) by January 1, 2025. This ruling pauses those requirements nationwide while further legal proceedings are underway.
While enforcement of the CTA is paused, the ruling is a preliminary decision and could be appealed. Businesses should remain aware of further legal developments and prepare for possible changes.
At this time, no immediate action is required. Companies do not need to submit BOI reports to FinCEN. However, staying informed and consulting legal or compliance advisors is advisable to understand the potential impact on your operations.
Legal Context and Court Decision
The injunction was issued in response to a lawsuit filed by the National Federation of Independent Business and several of its members. The plaintiffs argued that the CTA was unconstitutional on multiple grounds. They asserted that it exceeded Congress’s authority under the Commerce Clause, violated First Amendment protections by compelling speech and infringing on freedom of association, and infringed on Fourth Amendment rights by forcing disclosure of sensitive ownership information without proper safeguards.
The court found these arguments persuasive and determined that the CTA likely violates constitutional principles. As a result, enforcement of the Act has been suspended. At this time, businesses are no longer required to meet the January 1 reporting deadline unless a higher court reverses the decision.
For additional details, please refer to the full article here: Texas Federal Court Blocks Corporate Transparency Act, Halts Nationwide Enforcement.
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