6  ILLINOIS BUSINESS LEADER
6  ILLINOIS BUSINESS LEADER
FOCUS
On December 3, 2024, in the case of 
Texas Top Cop Shop v. Garland,  the 
U.S. District Court of Texas issued a 
nationwide preliminary injunction 
of the Corporate Transparency Act 
(CTA), which prevents the enforce­
ment of the CTA at this time. In an 
effort to combat money laundering, 
terrorism financing, and corruption, 
the CTA was enacted to require 
companies to file beneficial owner­
ship reports with the United Stated 
Financial Crimes Enforcement 
Network (FINCEN) unless a com­
pany falls within one of the CTA’s 23 
exemptions.
What Does This Mean for 
Companies That Have Not Yet 
Complied With the Reporting 
Deadline?
The ruling of the preliminary injunc­
tion is ONLY preliminary and the 
U.S. Department of Justice is likely 
to quickly appeal and potentially re­
quest the court to stay the injunction. 
The court did not rule on whether 
the CTA was constitutional, only that 
the act should not be enforced until 
the court is able to decide on the 
issue of whether the CTA is outside 
of Congress’ power and therefore un­
By Karen A. Tobin
Partner, Amundsen Davis
constitutional. The court ruled that 
the plaintiffs in this case demonstrat­
ed a substantial likelihood of success 
on the merits of their challenge to 
the CTA’s constitutionality and met 
their burden of proof. The plaintiffs 
had requested relief only for them­
selves, which included approximately 
300,000 trade association members. 
The defendants argued that it would 
result in a nationwide injunction as 
a practical matter. The court noted 
this practical effect and issued the 
nationwide injunction.
	
While we understand that, in 
light of this new ruling, clients may 
elect to pause reporting to FIN­
CEN, we recommend that clients 
not abandon preparations for their 
eventual compliance with the CTA. 
If the injunction is stayed or limited, 
clients should ensure that they are in 
a position to promptly complete their 
required filings.
December 5, 2024 
Employment Law Update
Enforcement of the Corporate Transparency 
Act Suspended by Federal Court’s Preliminary 
Injunction
In an effort to 
combat money 
laundering, terrorism 
financing, and 
corruption, the 
CTA was enacted to 
require companies 
to file beneficial 
ownership reports ...

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