Corporate Transparency Act – Unconstitutional and Injunction

For the second time this year, a federal district court has held the Corporate Transparency Act (the “Act”) to be unconstitutional. The ruling in the March 2024 case only applied to the plaintiffs named in the lawsuit. The difference with this court ruling is that the court entered a NATIONWIDE preliminary injunction temporarily blocking enforcement of the Act and its Beneficial Ownership Interest (“BOI”) reporting requirement for all 50 states.

I am not going to get into the specifics of the court’s ruling but “reporting companies” in existence prior to 2024 are not currently required to file the BOI report prior to December 31, 2024. For companies created in 2024, these companies are not currently required to file the BOI report within 90 days of the date the company was created. And, for companies created in 2025, these companies will not be required to file the BOI report within 30 days of the date the company was created.

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So, what does this mean for corporations and limited liability companies in Ohio? These companies are no longer required to submit the BOI report. If a company has already submitted the BOI report, the report will remain on file and no further filing requirements are required (such as if any of the information reported needs to be updated, corrected, etc.)

Since the court only issued a preliminary injunction, this case will proceed through the litigation process. If the court ultimately enters a permanent injunction, then it is expected that the federal government will also appeal such ruling just as the federal government appealed the ruling in March 2024. I will continue to monitor these two cases and provide updates as needed. But, please note, the recent court ruling is only a preliminary injunction and not a final ruling. It is entirely possible that some time in the future an appellate court could ultimately decide that the Act is constitutional which would require submitting the BOI report but on a modified timeline. But, for now, we will take the win that BOI reports no longer need to be filed until we learn otherwise.

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.