Texas court blocks the Corporate Transparency Act nationwide weeks before the filing deadline
On 3 December 2024 a federal court in Texas issued a nationwide preliminary injunction against the Corporate Transparency Act, weeks before the 1 January 2025 deadline for companies formed before 2024. The Fifth Circuit stayed and then reinstated the injunction in late December. On 23 January 2025 the Supreme Court stayed it pending appeal.
In Texas Top Cop Shop, Inc. v. Garland, the US District Court for the Eastern District of Texas issued a nationwide preliminary injunction on 3 December 2024. It blocked enforcement of the Corporate Transparency Act (CTA) and FinCEN's reporting rule, and stayed the reporting deadlines. The court found the plaintiffs likely to show that Congress lacked power to enact the CTA.
What happened next
- 23 December 2024: a Fifth Circuit motions panel stayed the injunction. FinCEN extended the 1 January 2025 deadline for pre-2024 companies to 13 January 2025.
- 26 December 2024: the Fifth Circuit merits panel vacated that stay, reinstating the injunction, so filing was again voluntary.
- 31 December 2024: the Government asked the Supreme Court to stay the injunction.
- 23 January 2025: the Supreme Court granted a stay pending appeal (McHenry v. Texas Top Cop Shop). It did not rule on whether the CTA is constitutional.
Who was affected
Millions of US companies facing the first big CTA deadline, and the advisers filing for them.
Later developments
A separate injunction (Smith v. US Department of the Treasury) kept reporting paused until it was stayed in February 2025. FinCEN then set a 21 March 2025 deadline, but announced on 21 March 2025 an interim final rule exempting all US companies and US persons. A final rule of 11 August 2026 made the exemption permanent. Only certain foreign companies registered to do business in the US must still report.
Sources
- Clifford Chance: US federal appeals court reinstates nationwide injunction against the CTA (December 2024)
- Supreme Court of the United States: McHenry v. Texas Top Cop Shop, Inc., No. 24A653 (23 January 2025)
- FinCEN: FinCEN Removes Beneficial Ownership Reporting Requirements for U.S. Companies and U.S. Persons (21 March 2025)