New Information for Business Owners: Corporate Transparency Act

Corporate Transparency Act Enforcement: An Update

However, on December 3, 2024, in Texas Top Cop Shop v Garland et al., the U.S. District Court for the Eastern District of Texas granted a preliminary injunction. A preliminary injunction is an action by the court during the pendency of a lawsuit that serves to put on hold certain actions while the case is being adjudicated in the courts. This decision has halted the enforcement of the CTA requirements due to concerns about its constitutionality and impact on small businesses.

If you have not yet completed the filing under the CTA, you do not have to at this time. While the Court’s ruling has put on hold the CTA’s enforcement, further court proceedings may reinstate the need to register with FinCEN. Note that if this decision is overturned, entities that have not filed may need to act quickly to be in compliance with the law.

If you have already filed with FinCEN, there is no need to be concerned and there is no additional action necessary. It is recommended that you remain informed as to the status of the case, the CTA, and its reporting requirements. Should the CTA be upheld, entities will again be required to report changes in beneficial ownership. At least for now, the fear of penalties for non-compliance can be put aside.

Author: Britt Burner, Esq. is a Partner at Burner Prudenti Law, P.C. focusing her practice areas on Estate Planning and Elder Law. Burner Prudenti Law, P.C. serves clients from New York City to the east end of Long Island with offices located in East Setauket, Westhampton Beach, Manhattan and East Hampton.