Federal Court Halts Enforcement of Corporate Transparency Act Nationwide

A Texas judge ruled the law likely unconstitutional, citing privacy, federalism, and First Amendment concerns, while businesses face uncertainty over compliance deadlines.

• The U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction against the Corporate Transparency Act (CTA), halting its enforcement ahead of the January 2025 compliance deadline.
• The ruling deemed the law likely unconstitutional, citing violations of privacy, First Amendment rights, and federal overreach into areas traditionally managed by states.
• The CTA requires millions of businesses to disclose detailed ownership information to FinCEN, a move intended to combat financial crimes but criticized for its burdensome compliance costs and privacy risks.
• Supporters of the CTA argue it is vital for transparency and anti-money laundering efforts, while opponents, including small business advocates, see it as an overreach that disproportionately impacts smaller enterprises.
• The ruling is not final, and the federal government is expected to appeal, leaving businesses uncertain about whether to prepare for compliance or await further legal developments.

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