The Corporate Transparency ACT (“CTA”) went into effect January 1, 2024 to increase the transparency of legal entities and combat illegal activities. The CTA imposes new reporting burdens on most U.S. entities. Notably, affected companies must report information about their beneficial owners to the Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”).
March 2024: An Important Update
Last week, a federal district court ruled that Congress lacked the power to enact the CTA, declaring the CTA unconstitutional. While FinCen responded that it will not enforce the CTA against the specific plaintiff in that action, it otherwise intends to continue enforcing the CTA and the reporting requirements. It remains to be seen if a broader court ruling prohibiting enforcement will be issued in the future.
What Does this Decision Mean for You?
At this time, continue to prepare to comply with the CTA and report beneficial ownership to FinCen. Click here for relevant deadlines.
Over the coming months, we expect more challenges to the CTA. We will closely monitor the legal developments and will keep you updated.
As always, please let us know if you have any questions or would like to discuss.
Tom Sowers approaches legal issues from a businessperson’s perspective. A Shareholder at Berman Fink Van Horn, Tom’s practice focuses on representing businesses and their owners in a wide range of transactional matters and legal issues.
Ruari O’Sullivan takes the proactive approach. In working with business owners, he anticipates their issues and puts structures in place to protect their interests.
