Client Notice: Federal District Court Temporarily Enjoins Enforcement of the Corporate Transparency Act

On December 3, 2024, the United Stated District Court for the Eastern District of Texas issued an injunction temporarily prohibiting the federal government from enforcing the Corporate Transparency Act nationwide. Pending a final ruling, companies subject to the CTA, known as “reporting companies,” are not required to comply with the CTA’s reporting requirements or filing deadlines.

Prior to this ruling, reporting companies were required to submit an initial Beneficial Ownership Information Report (a “BOIR”) to U.S. Department of Treasury’s Financial Crimes Enforcement Network (“FinCEN”), in most cases on or before January 1, 2025. Notwithstanding the preliminary injunction, a reporting company is not prohibited from submitting a BOIR to FinCEN prior to the court issuing a final order.

This preliminary injunction creates uncertainty for reporting companies and their advisors, particularly because it does not address when filings would be due in the event that the injunction is lifted (thereby reinstating the CTA’s filing requirements and deadlines) after January 1, 2025. To minimize the risks to the reporting companies McLane Middleton represents, the firm will proceed as follows:

• For a reporting company for which McLane Middleton currently possesses all information to submit a BOIR, we will proceed with that filing;
• For a reporting company for which McLane Middleton does not have all of the information from the company needed to submit a BOIR, such as an employer identification number for the reporting company or photo ID for a beneficial owner, we will not take any further action to obtain this information from you or file a BOIR unless otherwise directed by the reporting company in writing. We will continue to be available to assist those clients that elect to make a BOIR filing; and
• For a newly formed reporting company, we will attempt to collect the information necessary to file a BOIR at the time of formation, but will not file a BOIR unless directed by the reporting company in writing to make this filing.

We will continue to monitor developments in the U.S. District Court case. Should you have questions about the status of the case or about the course of action, during this period of ongoing uncertainty, please contact your McLane Middleton attorney or Attorney Tony Delyani, our director overseeing CTA education and outreach at (603) 334-6935 or tony.delyani@mclane.com.