A U.S. District Court issued a temporary nationwide injunction against enforcement of the Corporate Transparency Act, which required entities, including pork operations, organized as corporations to report by the end of this year ownership information to the U.S. Department of Treasury.

The U.S. District Court for the Eastern District of Texas also stayed the reporting law’s implementing regulation, saying “reporting companies need not comply with the CTA’s Jan. 1, 2025, [beneficial ownership information] reporting deadline pending further order of the Court.”

In granting the injunctions, the court opined that “the CTA is likely unconstitutional as outside of Congress’s power.” In passing the law, the court noted, Congress was attempting to monitor companies created under state law and end a feature of corporate formation under states: anonymity. The CTA required domestic LLCs, corporations and other entities formed through filing with a secretary of state or a comparable office to report detailed, personal information about company owners.

The CTA was enacted in 2021 ostensibly to enhance transparency in entity structures and ownership to combat money laundering, tax fraud and other illegal activities. The law exempted banks and credit unions, insurance companies, certain tax-exempt entities under the Internal Revenue Code, inactive businesses and certain large operating companies, defined as those with more than 20 full-time employees, an operating presence at a physical address in the United States, and more than $5 million in gross revenue.

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