In a significant legal development, the United States District Court for the Eastern District of Texas has issued a preliminary injunction against the enforcement of the Corporate Transparency Act (CTA) and its implementing regulations. This decision came in response to a lawsuit filed by Texas Top Cop Shop, Inc., and other plaintiffs, who contended that the CTA infringed upon constitutional principles by imposing federal oversight on state-registered companies and requiring the disclosure of detailed personal information about their owners.
The court found that the CTA represented an unprecedented federal intrusion into areas traditionally managed by state governments and posed a threat to the anonymity historically afforded to corporate owners. Additionally, the Court found the Plaintiffs’ were likely to succeed in showing these constitutional violations and enforcement of the CTA compliance deadline would cause irreparable harm. The Court stayed the deadline to file a report under the Administrative Procedure Act (APA) § 705.
We are studying the decision and will monitor FinCEN’s response in the next days in order to advise clients on what to do regarding filing before the upcoming December 31st deadline.
The full text of the decision is available here: Bloomberg Law
If you have any questions, please feel free to contact Emma Rodgers at erodgers@wsh-law.com.
