On March 1, 2024, a U.S. District Court for the Northern District of Alabama ruled that the Corporate Transparency Act (“CTA”) which requires most reporting companies to file a beneficial ownership information report with the Financial Crimes Enforcement Network (“FinCEN”) is unconstitutional.
The CTA, aimed at combating money-laundering and financial crimes, met with significant opposition. The ruling issued in favor of the National Small Business Association, asserts that Congress exceeded its powers by mandating companies to disclose personal stakeholder information to FinCEN.
The ruling only applies to enforcement of the CTA against the National Small Business Association. Thus, other reporting companies which are not exempt under the CTA should continue to comply with the filing requirements until further notice.
Stay tuned for further developments.
