The Corporate Transparency Act - Update

On March 1, 2024, the United States District Court for the Northern District of Alabama issued its opinion in the case of the National Small Business United, d/b/a/ the National Small Business Association, et al., v. Yellen, regarding the constitutionality of the Corporate Transparency Act (the "CTA").  In its opinion (which can be found here) the Court concluded that the CTA exceeded the limits of Congress's constitutional authority.  As a result, FinCEN and the Department of Treasury are enjoined from enforcing the CTA against the specific Plaintiffs in that case.  It is anticipated that the Treasury Department will appeal this decision.

While that Court found the CTA to be unconstitutional as it relates to those specific Plaintiffs, all other "Reporting Companies" are still required to comply with the CTA at this time.  As such, we recommend that "Reporting Companies" continue to follow the guidance set forth in our February 1, 2024 client alert (found here) until further Court action provides otherwise. 

We will continue to monitor any appellate proceedings related to this case, as well as any other developments regarding the CTA, and will be in contact with additional information in the near future. In the meantime, if you have any questions or concerns, please feel free to contact us.