Corporate Transparency Act Ruled Unconstitutional.
The Impact On Beneficial Ownership Information Reporting.
The US District Court for the Northern District of Alabama found the Corporate Transparency Act (“CTA”) unconstitutional. The CTA, which was enacted on January 1, 2021, requires certain legal entities to file beneficial ownership information reports with the US Department of the Treasury’s Financial Crimes Enforcement Network.
A judgment was issued permanently enjoining the US Government from enforcing the CTA against the two plaintiffs —the National Small Business Association, a non-profit trade group that represents more than 65,000 member companies, and one of its members. The government is likely to appeal the ruling to the US Court of Appeals for the Eleventh Circuit. The US Department of the Treasury or FinCEN may also issue a statement or guidance about the ruling.
In the interim, the CTA continues to be effective as to all Reporting Companies other than the plaintiffs in the Alabama Case. We will continue to monitor for any developments related to this case but also note that, as of now, filings for new Reporting Companies formed in 2024 will continue to become due starting March 31, 2024 (90 days after the effective date of Jan. 1, 2024).
For more information on beneficial ownership information reporting please click on link below:
https://gallerosrobinson.com/insight-inside/beneficial-ownership-information-reporting-requirements
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The information presented here should not be construed as legal, tax, accounting, or valuation advice. No one should act on such information without appropriate professional advice and after a thorough examination of the particular situation.