On December 3, 2024, the United States District Court for the Eastern District of Texas issued a Memorandum Opinion and Order granting Plaintiffs’ motion for a preliminary injunction, on a nationwide basis, of the Federal Corporate Transparency Act (“CTA”) and enforcement of the CTA by the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”) (Texas Top Cop Shop, Inc. et al. v. Merrick Garland, Attorney General of the United States, et al. (4:24-cv-478)). Although the Court concluded that “[t]he CTA is likely unconstitutional as outside of Congress’s power,” the current decision only enjoins the CTA pending further decision from the Court. As a result, the CTA reporting requirements and deadlines are stayed unless and until further decision from the Court.
While the CTA is currently enjoined on a nationwide basis, the District Court’s decision does not affect any similar state corporate transparency laws. New York’s LLC Transparency Act (the “NY Act”) requires the disclosure of beneficial ownership information to the New York Department of State by limited liability companies formed under the laws of the state of New York and foreign limited liability companies authorized to do business in the state of New York. The NY Act is largely based on the CTA and currently is set to go into effect on January 1, 2026.
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