Federal Court Issues Nationwide Preliminary Injunction Against Complying with Corporate Transparency Act’s January 1, 2025 Reporting Deadline

December 6th, 2024 | Blog, Community Association Law Blog, News

By Eric F. Frizzell Esq.

On December 3, 2024, a federal court in Texas issued a preliminary injunction, applicable nationwide, staying enforcement of the Corporate Transparency Act (“CTA”) and its reporting requirements. The court stated that “reporting companies need not comply with the CTA’s January 1, 2025 BOI reporting deadline pending further order of the Court.”

Under this ruling, New Jersey community associations and their Boards do not presently need to file with the U.S. Department of Treasury FinCEN identifying information regarding their Board members.

It is important to note, however, that the injunction is preliminary, meaning that it can be overturned by an appellate court (the government could immediately appeal the order), or even be lifted, after further consideration, by the court that issued it (which is doubtful given the court’s detailed ruling). The court noted it “has determined that the CTA and Reporting Rule are likely unconstitutional for purposes of a preliminary injunction” but “has not made an affirmative ruling that the CTA and Reporting Rule are contrary to law or that they amount to a violation of the Constitution.” Such determinations await further proceedings before the court and likely on appeal.

For now, therefore, your community association Board does not need to comply with the January 1, 2025 reporting deadline. We will notify you if the preliminary injunction is lifted and the reporting requirement is reinstated. If your Board wishes to submit the report despite the injunction, you can still do so.

As always, please let us know if you have any questions.