Judge Blocks Federal Ownership Reporting Requirements
Source: US Chamber of Commerce
A federal court in Texas halted the implementation of the Corporate Transparency Act’s (CTA) beneficial ownership reporting requirements. Holding that the CTA is likely unconstitutional, the court issued a preliminary injunction barring the government from enforcing the CTA and its reporting requirements against anyone.
Why it matters: Prior to the ruling, small businesses that met certain criteria would have had to file reports with the Department of the Treasury by January 1, 2025, or risk fines and criminal penalties.
Looking ahead: The preliminary relief will remain in effect until the conclusion of legal proceedings, at which point the court may enter a permanent injunction. In the meantime, the government will likely appeal the preliminary injunction.
Bottom line: Unless and until an appellate court overrules or narrows the injunction, no businesses are obligated to comply with the reporting requirements.