By: Dimple Sankhla
In a significant development, a federal district court in Texas has issued a nationwide preliminary injunction blocking the enforcement of Beneficial Ownership Information (BOI) reporting requirements under the Corporate Transparency Act (CTA). This decision stems from the case Texas Top Cop Shop v. Garland (December 3, 2024), where the court ruled that Congress overstepped its authority in enacting the CTA, infringing on states’ rights to regulate businesses.
As a result, the January 1, 2025, reporting deadline for businesses to file BOI reports with the Financial Crimes Enforcement Network (FinCEN) is no longer enforceable. For now, businesses are not required to submit these reports.
This ruling underscores the court's position that federal mandates like the CTA may unconstitutionally encroach on state governance. However, the case is likely to be appealed, meaning the legal landscape could shift again.
During this pause in enforcement, businesses should stay informed and prepared for potential changes. The situation is evolving, and we will continue to provide updates as new information emerges.
If you have any questions about how this ruling may affect your compliance obligations, feel free to reach out. We're here to help you navigate these changes.
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