Corporate Transparency Act (BOI Reporting Requirement) Blocked Nationwide
BREAKING:
Less than one month before the federal reporting deadline for Beneficial Ownership Information (“BOI”), a federal district court in Texas issued a nationwide preliminary injunction against enforcing the beneficial ownership reporting requirements mandated by the Corporate Transparency Act (CTA). (Texas Top Cop Shop v. Garland (December 3, 2024) U.S. Dist. Ct., Eastern Dist. Of Texas, Case No. 4:24-CV-478). The case began at the request of a family-run firearms and tactical gear retailer, called Texas Top Cop Shop Inc., as well as other co-plaintiff businesses and the Libertarian Party of Mississippi.
The briefing was powerful, including such quotables as “Plaintiffs fear this flanking, quasi-Orwellian statute and its implications on our dual system of government,” a truly delightful quote from Judge Mazzant.
The CTA require(d) that an estimated 32.6 million existing business entities disclose their beneficial owners to the Treasury Department’s Financial Crimes Enforcement Network before 2025. The government argued that the law’s function—to crack down on anonymous shell companies and deter money laundering, terrorism financing, and other illicit economic activity—falls within Congress’s regulatory duties.
The court ruled that Congress exceeded its authority in enacting the CTA, resulting in an unconstitutional infringement on states’ rights to regulate businesses. The court granted a nationwide injunction prohibiting FinCEN from enforcing the January 1, 2025 reporting deadline for all reporting companies.
The opinion was issued on December 3, 2024, and an appeal is anticipated. However, for now, businesses do not have to file beneficial ownership information reports with FinCEN.
Check with your attorney for more updates.
The opinion is available at:
