The Law
The Corporate Transparency Act (the CTA), a law enacted by Congress requiring certain business entities to disclose beneficial ownership information (a BOI Report) to FinCEN, went into effect on January 1, 2024, and obligates reporting companies formed before January 1, 2024, to file BOI Reports on or before January 1, 2025.
The Challenge
On May 28, 2024, six plaintiffs filed a lawsuit in the U.S. District Court for the Eastern District of Texas (the “Court”) seeking declaratory judgement that the CTA is unconstitutional. The following week, plaintiffs moved to enjoin enforcement of the CTA and the final rule implementing the CTA (the “Reporting Rule”) on the basis that the CTA is unconstitutional both on its face and as applied under the First, Fourth, Ninth and Tenth Amendments of the US Constitution.
The Opinion
On December 3, 2024, the Court granted a nationwide injunction of the CTA and the Reporting Rule, finding that “it is in the public’s best interest to prevent the Government from enforcing the CTA and Reporting Rule.” Thus, the...
