On December 3, 2024, in the case of Texas Top Cop Shop, Inc., et al. v. Garland, et al., the U.S. District Court for the Eastern District of Texas granted a nationwide preliminary injunction blocking enforcement of the Corporate Transparency Act (CTA).

Temporary Block on BOI Reporting: The Court’s order states that neither the CTA nor the implementing rules adopted by the Financial Crimes Enforcement Network may be enforced. In contrast with the injunction issued in National Small Business United v. Yellen, which applied only to the plaintiffs in that case, the Texas Top Cop Shop injunction applies nationwide.

Impact on Businesses: The CTA provides that “reporting companies” (as defined by the CTA) formed prior to January 1, 2024, must file an initial beneficial ownership information report before January 1, 2025, while reporting companies formed after January 1, 2024, were to file within 90 days of formation. Under the Texas Top Cop Shop injunction order, reporting companies (regardless of when they were formed) do not need to comply with the filing requirements, pending further order of the Court. 

Uncertainty Regarding Future Enforcement: The Court’s order is not a final decision, so businesses should remain cautious and be prepared to comply with the CTA reporting requirements if they are revived as the case proceeds, or if the injunction is lifted.

We will continue to monitor this situation closely and provide updates as needed.