Fifth Circuit Again Blocks Corporate Transparency Act

In yet another surprise move, a federal court has again blocked the requirement that companies file beneficial ownership information, as required by the federal Corporate Transparency Act (CTA).

To review the convoluted path of this law through the court system:

• The law’s passage required companies to file certain ownership information;
• On December 3, 2024,  the U.S. District Court for the Eastern District of Texas preliminarily enjoined enforcement of the law nationwide;
• On December 23, 2024, a motions panel of the U.S. Court of Appeals for the Fifth Circuit stayed the injunction, thereby reviving the reporting requirement;
• Late yesterday, a “merits panel” of the Fifth Circuit vacated the stay of the injunction, meaning the reporting requirements are on hold again.

The Fifth Circuit has scheduled oral arguments on the merits of the preliminary injunction for March 25, 2025, after which we should know more about whether the law will be enforced. Other possible scenarios could play out before the argument date, such a request by the government for an emergency reconsideration of the order or Congressional action. Reid and Riege will continue to monitor the situation and provide further updates as they emerge.