Future of the Corporate Transparency Act is Uncertain

With the January 1, 2025, deadline for beneficial ownership information filings pursuant to the Corporate Transparency Act (the “CTA”) for entities formed prior to 2024 rapidly approaching, Judge Amos L. Mazzant III of the US District Court for the Eastern District of Texas preliminarily enjoined the enforcement of the CTA and its related regulations nationwide. On December 3, 2024, the Court issued an opinion concluding that a nationwide injunction was necessary to provide meaningful relief to the plaintiffs given the national reach of the CTA. This decision effectively pauses enforcement of the CTA and stays the January 1, 2025, compliance deadline pending further action of the Court.

Although the future of the CTA is uncertain at this time, businesses formed or registered to do business in the United States should continue monitoring the status of the CTA, both with respect to active litigation and legislative developments. In the event the injunction is overturned, businesses may have limited time to comply with the CTA. Detailed analysis of each business entity and each further development will be needed. The attorneys at Stites & Harbison are available to help.