On December 3rd, 2024, a United States District Court for the Eastern District of Texas ruling has blocked the Corporate Transparency Act (“CTA”) nationwide. The CTA, which would have required most entities to submit information on their “Beneficial Owners” to the United States Department of the Treasury’s Financial Crimes Enforcement Network, carried substantial penalties of up to $500/day. In yesterday’s opinion, the Eastern District of Texas found the CTA to be “likely unconstitutional” and found that its looming December 31, 2024, deadline would irreparably harm companies that were required to comply.
Previously, in March of 2024, the United States District Court for the Northern District of Alabama had blocked enforcement of the CTA, but only for the plaintiffs in that lawsuit. This new ruling has expanded that to all entities which would have otherwise been required to comply with the CTA.
Frier Levitt will continue to provide updates on the CTA, including any potential appeals by the Treasury. The injunction is preliminary, not permanent, and we’ll be following up with a more in depth article. If you have any questions regarding this ruling, and how it may impact you or your business contact Frier Levitt today.
