ALERT: Nationwide Stay Against CTA is Back On

In an interesting turn of events, on December 26, the U.S. Court of Appeals for the Fifth Circuit vacated (i.e. nullified) its December 23 ruling that reinstated the requirement to comply with the Corporate Transparency Act (“CTA”) and its beneficial ownership interest reporting requirements by January 13, 2025. The Fifth Circuit essentially revived the preliminary injunction entered against the U.S. Government by the trial court earlier this month (read that order here), so that businesses do not yet have to comply with the CTA. In so doing, the Fifth Circuit 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.”

Briefing should be completed by February 28, 2025, with oral arguments currently scheduled for March 25, 2025, although this schedule may change. The preliminary injunction will likely stay in place through oral arguments.

What does this mean for Ohio businesses?

The reinstatement of the preliminary injunction again pauses the enforcement of the CTA filing deadlines and allows business owners to forego compliance–at least for the moment. The reinstatement does not address the merits of the arguments regarding the constitutionality of the CTA. Rather, it temporarily halts enforcement while litigation plays out. So, Ohio business owners can again relax and not yet worry about filing a beneficial ownership interest report with FinCEN.

This reprieve is only temporary.

Please keep in mind the preliminary injunction is temporary and pauses enforcement until the merits of the various legal arguments are fully adjudicated. The injunction may be lifted at any point. In contrast, if the original plaintiffs ultimately succeed, the reporting requirements under the CTA may be struck down and enjoined indefinitely. You should continue to check in on this matter as it progresses.

What should you do in the meantime?

Notwithstanding the reinstatement of the nationwide stay, business owners should continue to gather information and documentation necessary to comply with the CTA. As we have seen just this last month, things can change with a moment’s notice, so business owners should be ready to comply if and when the CTA requirements are reinstated.

Please reach out if you have questions.

If you have questions about how this ruling may affect your business or if you need assistance with compliance under the CTA, please do not hesitate to reach out to our team. We are here to help you navigate these changes and ensure your business stays on track. We will continue to monitor this and related litigation and will provide updates as they happen.