On March 1, 2024, a U.S. District Judge in Alabama issued a memorandum opinion and final judgment in National Small Business United v. Yellen, finding that the Corporate Transparency Act (CTA) is unconstitutional because it exceeds the Constitution’s limits on Congress’ power.
The court permanently enjoined the FinCEN (Treasury Department’s Financial Crimes Enforcement Network) from enforcing the CTA against plaintiffs in that case.
It remains to be seen how the decision of this ruling will impact other Reporting Companies and their Beneficial Owners and Company Applicants, though we anticipate an immediate appeal by the Treasury.
At this time, there is no direct change to CTA compliance requirements, and it remains prudent practice for clients to continue to abide by the reporting requirements set forth under the Act. Our prior memorandum (which can be found here) gives further detail about the CTA’s requirements.
Wilson Ratledge will continue to monitor the developments and its implications on the future of the CTA.