BOI Compliance Paused: Court Halts CTA Reporting Rule

Written By Kate Strauss

On December 3, 2024, the U.S. District Court for the Eastern District of Texas issued a nationwide injunction in Texas Top Cop Shop, Inc. v. Garland. This decision halted enforcement of the Corporate Transparency Act (CTA) and its Beneficial Ownership Information (BOI) reporting requirements. The court ruled that Congress likely exceeded its authority when it passed the CTA, raising constitutional concerns.

Congress enacted the CTA in 2021 to combat money laundering by requiring certain corporate entities to disclose their beneficial owners to FinCEN. Lawmakers originally set the compliance deadline for January 1, 2025, but the injunction pauses these requirements nationwide. The Treasury Department plans to appeal the ruling, leaving the future of the CTA uncertain.

What This Means for You

You do not need to file Beneficial Ownership Information with FinCEN right now because compliance with the CTA is voluntary. However, if courts overturn the injunction, these reporting obligations may return.

Should You File Voluntarily?

  • Pros:

    • Filing now prepares your business for potential future compliance requirements.

  • Cons:

    • Filing takes time and resources that you might not need to spend right now.

    • Sharing ownership details voluntarily may expose your business to regulatory scrutiny.

If you want to decide whether filing now or waiting is best for your business, Galvanize Law Group can help. Contact us today to discuss your options.

Galvanize Law Group provides resources and information for educational purpose only. These articles are general in nature and Galvanize Law Group does not guarantee that the information is accurate at the time of review, given the changing nature of the law and its application to different facts and circumstances. These resources are not intended to and do not constitute legal advice. No attorney client relationship is formed and no representation is solicited by the publication of these resources.
Kate Strauss
Previous

Celebrating Progress and Leading Change at Galvanize Law Group
Next

Die Hard for the Holidays