Corporate Transparency Act – Request For Stay Denied

As previously mentioned, on December 3, 2024, a federal court in Texas held the Corporate Transparency Act (the “Act”) to be unconstitutional. This court entered a NATIONWIDE preliminary injunction temporarily blocking enforcement of the Act and its Beneficial Ownership Interest (“BOI”) reporting requirement for all 50 states. The federal government was not happy with this ruling. The federal government filed an appeal and also filed a motion with the trial court requesting that the preliminary injunction be stayed so that all “reporting companies” have to continue to file the required BOI reports.

The Texas trial court expedited the consideration of the federal government’s request for the stay of the preliminary injunction. On December 17, 2024, the court ruled and DENIED the federal government’s request for the stay. This means that the preliminary injunction is still in effect and business owners are not required to comply with the Act and submit the BOI report.

Please remember that the trial court only issued a preliminary injunction. So, the court’s ruling is not yet final and, additionally, an appellate court is reviewing this matter. The determination if the Act is or is not constitutional is far from being over. This issue could end up before the United States Supreme Court as other federal courts have held that the Act is constitutional.

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I have been asked by clients if they should just go ahead and submit the BOI report pending the final resolution of this matter. I have counseled clients that since you are not currently required to submit the BOI report, I would hold off and wait to submit the BOI report when/if required. However, if you just want to get your BOI report submitted just to be done with it, there is nothing wrong with submitting the BOI report. The federal government is still accepting BOI report submissions.

Do not hesitate to be in contact if you would like to further discuss this appellate court update or any other business issues that you may be dealing with.

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Chris Corpus

Founding Partner at Corpus Law Inc

This article does not provide legal advice or create an attorney-client relationship. If you have any questions or would like to learn more about this topic or if you have other legal questions, do not hesitate to contact Chris Corpus, Esq. of Corpus Law Inc at 216-973-2475. Copyright Christopher A. Corpus 2024.