Background
The United States District Court for the Northern District of Alabama recently ruled that the Corporate Transparency Act (CTA) is unconstitutional. The court made the decision after hearing a case brought by the National Small Business Association (NSBA) and Isaac Winkles, an NSBA member and business owner. However, the ruling granted by the court is limited to the plaintiffs. After the ruling, FinCEN said it will not require the NSBA, or its members, to file beneficial ownership information reports at this time. It is expected that this litigation will continue through the appeal process. FinCEN filed an appeal on March 11, 2024.
What does this ruling mean for my business?
- The Meyer, Unkovic & Scott CTA Team is recommending that any entity formed this year (2024) make their filing with FinCEN.
- For entities created prior to 2024, we recommend that they complete the analysis, but hold off filing until we have additional direction based on the pending FinCEN appeal. Completing the analysis now will allow a relatively quick turnaround for filing if filing is determined to be necessary.
- If there is no ruling by the courts before the end of 2024, our recommendation, at this time, is that companies file by the 12/31 deadline.
Our Team will continue to monitoring the developments with this decision, as well as FinCEN’s response.
Additional Information
Information on the reporting obligations for businesses under the CTA can be found on our website at www.muslaw.com/corporate.
Questions
If you have questions you would like to discuss with respect to the CTA, please contact one of the CTA Team attorneys listed below:
Patricia E. Farrell; [email protected]; 412-456-2831
Amanda M. Daquelente; [email protected]; 412-456-2845
Maxwell Briskman Stanfield; [email protected]; 412-456-2870
Diana B. Bonino; [email protected]; 412-456-2863
Alexis K. McGann; [email protected]; 412-456-2846
To download a copy of this alert as a PDF, please click here.