Injunction Issued Against Corporate Transparency Act, But It’s Not the Final Word

A federal district court in Texas has issued a nationwide injunction against enforcement of the Corporate Transparency Act, including the rule requiring filing of beneficial ownership information (BOI) reports. While relief from the onerous reporting rules is welcome, the district court’s preliminary injunction is not a final decision and is subject to review by appellate courts.  If reversed on appeal, the reporting obligations would again be effective, quite possibly retroactively.

The penalties for non-compliance can be severe.  Reliance on administrative relief or a grace period to comply should the injunction not stand is a substantial business risk to companies and others required to file reports under the Corporate Transparency Act. We recommend that persons required to report before the injunction is issued still submit their reports by the January 1, 2025, deadline.

If our clients wish to discuss how the preliminary injunction affects you, please do not hesitate to contact one of the lawyers on our business team.

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