Corporate Transparency Act (CTA) under PRELIMINARY INJUNCTION
I hope this message finds you well. I wanted to update you on the Beneficial Ownership Information (BOI) reporting requirements under the Corporate Transparency Act (CTA).
As you may be aware, on December 3, 2024, the U.S. District Court for the Eastern District of Texas issued a preliminary injunction in the case of Texas Top Cop Shop, Inc. et al. v. Garland. This injunction temporarily halts the enforcement of the CTA and its reporting rule, including the January 1, 2025, BOI reporting deadline. Here are the key points to consider:
- Preliminary Injunction: This is a preliminary injunction, not a final disposition. BOI reporting is not dead at this point, and it is likely to be appealed.
- Potential Rush: If the injunction is lifted and the deadline is not delayed, there could be a mad rush to comply at the last minute. This could include computer delays, the inability to reach the site, creating a late filing, and subsequent penalties.
- Voluntary Compliance: A reporting company can still voluntarily comply with the law if they so choose.
- Our Recommendation: This decision is ultimately up to you. However, based on your risk tolerance, you need to decide whether to file now or wait.