A Texas federal court halted the implementation of the Corporate Transparency Act’s beneficial ownership reporting requirements that included America’s farmers, ranchers, and agribusinesses. The court held the CTA as likely unconstitutional, so it issued a preliminary injunction barring the government from enforcing the Act and its reporting requirements against anyone.
Before the ruling, small businesses that met certain criteria would have had to file reports with the Treasury Department by January 1, 2025, or risk fines and criminal penalties. The preliminary relief will remain in effect until the conclusion of legal proceedings, at which point the court may enter a permanent injunction.
In the meantime, the government is expected to appeal the preliminary injunction. The U.S. Chamber of Commerce says unless and until an appellate court overrules or narrows the injunction, no businesses are obligated to comply with the reporting requirements.
Congress enacted the CTA on January 1, 2021.