December 9, 2024

The OMNI360 Advisors team is committed to keeping our clients informed about significant legal and regulatory developments that may impact their businesses.

On December 3, 2024, Judge Amos L. Mazzant of the U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction against the Corporate Transparency Act (CTA) and its reporting rules (31 C.F.R. § 1010.380). The court ruled that the CTA is an unconstitutional overreach, halting enforcement and effectively suspending the December 31, 2024 compliance deadline for businesses in existence as of December 31, 2023. Reporting requirements for newly formed entities have also been paused. 

You can find the full text of the opinion here.

While this ruling provides temporary relief, the legal situation remains fluid, and businesses should be prepared for potential changes. A separate challenge to the CTA’s constitutionality is ongoing in the Eleventh Circuit (NSBU v. Yellen, No. 24-10736), which adds to the uncertainty.

Key Considerations for Businesses:

1. Stay Proactive: Keep a close eye on updates regarding this case and related litigation to anticipate any reinstatement of compliance obligations.

2. Review Your Records: Use this time to ensure your business records are well-organized and could meet the CTA’s reporting requirements if needed in the future.

3. Seek Professional Guidance: Contact Omni for tailored advice on how these developments may affect your business and what steps you can take to stay ahead.

The CTA was designed to require certain entities to disclose beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN). Businesses created before January 1, 2024, were originally required to file by December 31, 2024, with separate deadlines for newly formed entities. These requirements are now on hold, pending further court action.

If you have any questions or need assistance navigating this evolving regulatory environment, please reach out to our CTA Law team at CTALaw@OmniLLC.com. We are here to support you in protecting your business and ensuring compliance with applicable laws.