ARTICLE
A U.S. District Court judge in Alabama has ruled that the Corporate Transparency Act (CTA) is unconstitutional. However, the injunction only currently applies to the plaintiffs in the lawsuit. All other reporting companies that are not plaintiffs in this case are still bound by the CTA. As a reminder, under the CTA, companies must disclose the identities and other information about anyone who owns a stake of at least 25% or exercises significant control over the company. Existing companies have until the start of 2025 to file their disclosures. Companies created or registered in 2024 have 90 days to comply. ?The plaintiffs in this case, the National Small Business Association and one of its members, sued in November 2022, seeking a permanent injunction against the implementation of the CTA reporting rules. On March 1, 2024, a U.S. District Court judge in Alabama ruled that the CTA is unconstitutional because it “exceeds the Constitution’s limits on the legislative branch” and fails the “necessary and proper” test. This decision will not be the end of the matter. The U.S. government will likely appeal the decision to the Court of Appeals for the Eleventh Circuit. These court cases can be lengthy and uncertain processes, and the Eleventh Circuit could overturn this ruling. --FCA
A U.S. District Court judge in Alabama has ruled that the Corporate Transparency Act (CTA) is unconstitutional. However, the injunction only currently applies to the plaintiffs in the lawsuit. All other reporting companies that are not plaintiffs in this case are still bound by the CTA.
As a reminder, under the CTA, companies must disclose the identities and other information about anyone who owns a stake of at least 25% or exercises significant control over the company. Existing companies have until the start of 2025 to file their disclosures. Companies created or registered in 2024 have 90 days to comply.
?The plaintiffs in this case, the National Small Business Association and one of its members, sued in November 2022, seeking a permanent injunction against the implementation of the CTA reporting rules. On March 1, 2024, a U.S. District Court judge in Alabama ruled that the CTA is unconstitutional because it “exceeds the Constitution’s limits on the legislative branch” and fails the “necessary and proper” test. This decision will not be the end of the matter. The U.S. government will likely appeal the decision to the Court of Appeals for the Eleventh Circuit. These court cases can be lengthy and uncertain processes, and the Eleventh Circuit could overturn this ruling. --FCA