from Vincente LLP, https://vicentellp.com, It is unclear what the final outcome is going to be, but for now compliance obligations are stopped.
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A significant legal development has occurred regarding the Corporate Transparency Act (CTA). On December 3, 2024, the U.S. District Court for the Eastern District of Texas (Sherman Division) issued a nationwide preliminary injunction against the enforcement of the CTA and its January 1, 2025 filing deadline.
Court's Decision
The court's ruling suggests that the CTA and its associated Reporting Rule may face constitutional challenges. However, it's important to note that this is a preliminary decision and not a final judgment on the law's constitutionality. The court has temporarily stayed the January 1, 2025 compliance deadline under the Administrative Procedure Act's Section 705.
Implications of the Injunction
While this injunction remains in effect, the federal government cannot enforce CTA disclosures or the January 1, 2025, deadline. However, given this decision's preliminary nature, companies subject to CTA reporting should continue to monitor the case for any updates that could alter this order.
Scope of the Injunction
This injunction only applies to federal disclosure requirements under the CTA. State-level disclosure requirements are not affected by this federal court decision.
Next Steps
Please stay informed about any future developments in this case, as the CTA requirements could resurface (and this may or may not happen with advance notice). Additionally, businesses should remain aware of applicable state disclosure requirements (e.g., for New York LLCs).
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MARK SMITH
Smith Policy Group
1001 K Street, 6th Floor
Sacramento, CA 95814
(916) 335-5072
mark@smithpolicygroup.com
smithpolicygroup.com