COMPLIANCE ALERT UPDATE:
CORPORATE TRANSPARENCY ACT PRELIMINARILY ENJOINED

NSSF^® is sending this update to notify members of a nationwide preliminary injunction which has been issued blocking enforcement of the Corporate Transparency Act (the “CTA”), and its reporting requirements.

NSSF previously alerted members to the CTA and its reporting requirements, which require the vast majority of companies to report certain beneficial ownership information to the US Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”) by January 1, 2025. That alert can be found here. The vast majority of Americans have been unaware of these requirements, and the consequences for non-compliance, which can include felony-level penalties that automatically prohibit violators from purchasing or possessing firearms and exercising their Second Amendment rights.

On December 3, 2024, the CTA and its reporting requirements were preliminarily enjoined nationwide by order of the Court in Texas Top Cop Shop, Inc, Et Al. v. Garland, Et Al., a case being argued in the Eastern District of Texas. In its decision, the Court stated plaintiffs had shown a likelihood of success on their argument that the CTA is not a valid exercise of any enumerated powers of Congress. The Court’s full decision can be read here.

This nationwide injunction applies to all potential reporting companies, and means that the January 1, 2025 reporting deadline is suspended as long as the Court’s order remains in place. At the time of this update, neither the Treasury/FinCEN nor the Department of Justice have issued a statement on the injunction, but they are likely to appeal this decision and seek to overturn the injunction pending final outcome of the case.

NSSF will continue to monitor developments in relation to the CTA and this injunction, and keep members informed of any important status changes.