On December 3, 2024, Judge Amos L. Mazzant III of the US District Court for the Eastern District of Texas issued a preliminary injunction blocking the US Treasury department from enforcing the Corporate Transparency Act also known as the CTA.

The CTA, which went into effect January 1, 2024, implemented uniform federal information disclosure requirements for domestic and foreign reporting companies registered to do business in the United States, unless otherwise exempt. The CTA requires such reporting companies to disclose to the Financial Crimes Enforcement Network (FinCEN) certain information about the company and its beneficial owners. Before today’s ruling, for entities that are created or first registered beginning in 2024, the report must be filed within 90 days of incorporation and for all other entities, the filing deadline was to be January 1, 2025. The CTA is aimed at enhancing corporate transparency and combating financial crimes, particularly money laundering and terrorist financing. If the injunction is reversed, noncompliance with the CTA may result in significant fines and prison terms.

Hanson Bridgett is monitoring the situation for further developments. For further information about the Corporate Transparency Act, please visit our CTA Resource Center.