On December 26, 2024, the Fifth Circuit Court of Appeals vacated its December 23 stay of the nationwide preliminary injunction issued by a Texas district court against the Corporate Transparency Act (CTA), effectively reinstating the injunction. As a result, CTA compliance is currently voluntary.
The Court stated: “[I]n order to preserve the constitutional status quo while the merits panel considers the parties’ weighty substantive arguments, that part of the motions-panel order granting the Government’s motion to stay the district court’s preliminary injunction enjoining enforcement of the CTA and the Reporting Rule is VACATED.”
At this point, reporting companies have three options: (1) prepare and file their CTA reports despite the injunction, (2) prepare their CTA reports but hold off on filing, or (3) pause CTA compliance efforts altogether. Given the ongoing uncertainty surrounding the CTA, we recommend that reporting companies prepare their CTA reports but hold off on filing. This approach ensures that they are ready to file promptly if the Fifth Circuit ultimately upholds the CTA’s constitutionality.
Attorneys at Wolfson Bolton Kochis PLLC are available to assist with CTA compliance. Please contact Amy H. Smith ([email protected]) for more information.
