On December 3, 2024, the U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction in the case of Texas Top Cop Shop, Inc. v. Garland, temporarily halting the enforcement of the CTA and its beneficial ownership reporting requirements.
In response, FinCEN issued guidance stating that, while the injunction is in effect, businesses are not required to file their beneficial ownership information. The court also stayed all deadlines for compliance. However, FinCEN also clarified that companies may still voluntarily submit their reports during this time. This guidance ensures businesses are clear on their obligations during the ongoing litigation.
The Department of Justice filed a Notice of Appeal on December 5, 2024, challenging the injunction. While several district courts have upheld the CTA’s constitutionality, including those in Virginia and Oregon, FinCEN will comply with the injunction as long as it remains in effect. Therefore, businesses are not required to submit beneficial ownership reports and will not face penalties for non-compliance during this time, though they may still voluntarily submit the reports.
Given this uncertainty, reporting companies should make a determination as to whether to submit their BOI report voluntarily or await an appellate decision on the injunction. For those companies that decide to wait, completing the analysis to identify their beneficial owners under the CTA may facilitate filing in the event enforcement of the law is reinstated.
For those reporting companies that choose to file voluntarily or need assistance in determining their beneficial owners, our Firm remains ready to assist them in navigating the process and ensuring compliance with the requirements.
