Injunction Against Enforcing The Corporate Transparency Act (CTA)

A federal district court in Texas issued a nationwide preliminary injunction against enforcing the beneficial ownership reporting requirements mandated by the Corporate Transparency Act (CTA). (Texas Top Cop Shop v. Garland (December 3, 2024)

An injunction was filed against the Transparency Act.

On Tuesday, a federal Judge in Texas declared that the BOI reporting is unconstitutional. The Judge stated it violates 4th amendment rights. Furthermore, the Judge noted that the rights of small businesses are protected under the state constitution (when you register as an entity, you become a small business entity of the state, as clearly stated in your legal documents or certifications) rather than the federal government.

Thus, the transparency act was a federal overreach and an infringement on small business rights (it was excessive).

Additionally, the billions of taxpayer dollars invested in creating and structuring the transparency act, including funds for dedicated staffing and advertising, are now wasted.

As of November, it has been reported that over eight million businesses have already submitted their information to FinCen. Many are questioning whether this information will be erased, given the violation.

If you haven't filed, you're unaffected.

So if you have not filed your BOI, you won't need to anymore. However, the politics surrounding the creation of the transparency act remain controversial. It's known that President Joe Biden supports this law, but the newly elected president for 2025, Trump, had vetoed it back in 2020. President Trump has yet to comment, so it will be interesting to see how the politics and appeals regarding this law will unfold.

Remember To Support Small Business With-in Your Community!

Remember to support small businesses in your thoughts. They truly need the support. Small businesses are the backbone of local economies, providing jobs, supporting local suppliers, and enhancing community welfare. Many also contribute to local schools, charities, youth sports teams, and other organizations.

So, while shopping this Christmas, don't forget to purchase from at least one small business in your community.