Corporate Transparency Act: Recent Developments

Late last week, a federal court in Alabama ruled that the Corporate Transparency Act is unconstitutional. As many of us know, the CTA, which recently went into effect, directs the Treasury’s Financial Crimes Enforcement Network (FinCEN) to establish a nationwide database of who owns and controls what companies.
The CTA imposed a modest but meaningful regulatory burden on small businesses to report the status of their beneficial ownership. But before you celebrate the demise of this legislation, take the following into account:
1. The court’s ruling only applies to the parties to the lawsuit. 2. The government is certain to appeal, meaning this matter is far from over.
In other words, unless you are a party to the lawsuit, you are still bound by the CTA and must continue to comply with its requirements.