Resources

For a more detailed overview on the CTA, click here.  A webinar providing further explanation can be viewed here, which was presented December 7, 2023.

On March 1, 2024, a federal district court in the Northern District of Alabama concluded that the Corporate Transparency Act (“CTA”) exceeded Congressional powers and enjoined the Department of the Treasury from enforcing the CTA against the plaintiffs. National Small Business United v. Yellen, No. 5:22-cv-01448 (N.D. Ala.). On March 11, 2024, the U.S. Department of Justice appealed the district court’s decision to the Eleventh Circuit Court of Appeals.

In a March 11, 2024 statement, the U.S. Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”) specified that the district court’s decision enjoined enforcement of the CTA with respect to the plaintiffs of the litigation detailed above. However, aside from these named plaintiffs, FinCEN specifically provides that “reporting companies are still required to comply with the law and file beneficial ownership reports.” Thus, associated fines and penalties are still enforceable against reporting companies while this litigation continues to unfold.

The CTA, which went into effect January 1, 2024, requires certain corporate entities to report identifying information on (i) the business itself; (ii) the beneficial owners of the business; and (iii) in some cases, the professional advisor(s) that helped form the entity. Failure to file as required under the CTA carries steep civil and criminal penalties, including a fine up to $10,000, imprisonment for up to two years, or both, for any person who willfully (i) provides or attempts to provide false/fraudulent information or (ii) fails to report and/or update a report previously made.

For questions regarding the CTA and how your business should complete mandatory reporting, please do not hesitate to contact BMD Member Blake Gerney at brgerney@bmdllc.com or BMD Attorney Jacob Davis at jrdavis@bmdllc.com.