What Happened

Reporting under the Corporate Transparency Act (CTA) is once again on hold.

In Texas Top Cop Shop v. Garland et al. (Case 24-40792) (Dec. 26, 2024), the merits panel of the US Court of Appeals for the Fifth Circuit vacated the December 23 order by the Fifth Circuit’s motions panel that had stayed the nationwide injunction halting CTA reporting. In other words: the nationwide injunction is back in place, and all reporting obligations under the CTA are once again paused, with no beneficial ownership information (BOI) reporting required until further notice.

What’s Next

While litigation remains ongoing, the newest decision of the Fifth Circuit states that the Court wishes “to preserve the constitutional status quo while the merits panel considers the parties’ weighty substantive arguments.” The government’s appeal of the injunction is expedited, and the Court said that a briefing schedule “will issue forthwith.”

To this point, four district courts have addressed the CTA’s constitutionality: Two held the CTA is likely constitutional and two view the CTA as unconstitutional, with one issuing a nationwide injunction (Texas Top Cop Shop) and the other only issuing an injunction that covered the plaintiffs in the case (Nat’l Small Bus. United v. Yellen). The government in the Texas Top Cop Shop matter now has the option to either argue the merits before the Fifth Circuit or seek further emergency relief from the Supreme Court.

Timelines on further updates are unclear and, for now, we are counseling clients to be prepared to file if their entities meet the reporting obligations under the CTA. 

Jane Hinton, Amy McDaniel Williams, and Conor Shary also contributed to this article.