Earlier posts have discussed the 2025 rollback of the U.S. federal Corporate Transparency Act (“CTA”), enacted some years ago to require beneficial ownership reporting by a broad range of companies organized or doing business in the United States. The CTA is currently limited in its application to companies organized outside the United States but registered to do business directly (i.e., not through domestic subsidiaries) in any U.S. state.

Although that rollback vastly reduced the number of companies estimated to be required to comply with the CTA’s beneficial ownership reporting requirements (from some 32 million to approximately 12,000), it did not repeal the legislation; and, because the rollback was the result of administrative action by the U.S. Department of the Treasury, it is subject to possible reversal at any time.

Accordingly, opponents of the legislation continue their efforts to have the statute struck down on constitutional grounds – with mixed success.

In 2024 the National Small Business Association secured a limited stay of enforcement in its application against that trade association’s member firms, on the grounds that the legislation improperly infringed the rights of individual states under the U.S. Constitution to regulate companies within their borders. Because of the jurisdictional limits of the trial court that granted the stay, the pause in the legislation’s enforcement applied only to NSBA members located in certain parts of the American South.

An appellate court has now lifted the stay of enforcement and remanded the case to the trial court for a redetermination on the merits in light of the 2025 administrative rollback of the CTA’s scope.

A similar CTS injunction case is currently pending in another U.S. federal appeals court.

A number of state attorneys general have filed an amicus curiae brief with the U.S. Supreme Court, asking the high court to take up both this case and the NSBA decision described above, and to rule that the CTA, even in its pared-back form, violates the U.S. Constitution.

Since the Texas Top Cop Shop case is still pending at the lower appeals court level, any action by the Supreme Court is not likely to occur soon.