On December 3, 2024, the United States District Court for the Eastern District of Texas issued a preliminary injunction in Texas Top Cop Shop, Inc. et al. v. Garland, halting FinCEN’s enforcement of the Corporate Transparency Act (CTA) and its requirement for non-exempt entities to file Beneficial Ownership Interest Reports (BOIRs) by certain deadlines.

 The CTA was found unconstitutional in a March 2024 ruling by a federal court in Alabama in National Small Business United v. Yellen, but the decision only applied to the specific plaintiffs that brought the lawsuit. The Texas court’s decision in Texas Top Cop Shop, Inc., applies nationally, explicitly enjoining the CTA’s enforcement, its reporting requirements, and stayed the compliance deadlines for all reporting companies. [A copy of the Court’s opinion can be found here.]

 The U.S. government has indicated it will appeal the Texas decision, as it did in the Alabama case, leaving the final outcome uncertain. However, based on the Texas decision, reporting companies need not take further action on the CTA and BOIRs until the injunction is modified or the stay is lifted through the appeal process.