KMK Law Corporate & Securities Blog

On March 1, 2024, a Federal District Court in Alabama held that the Corporate Transparency Act (the “CTA”) is unconstitutional.[1] The Court reasoned that the plaintiffs were entitled to summary judgment because the CTA “exceeds the Constitution’s limits on Congress’ power.” As the Court ruled Congress exceeded its enumerated powers, the Court found it unnecessary to render a decision on the plaintiffs’ other arguments, specifically, whether or not the CTA violates the First, Fourth, and Fifth Amendments.

The Corporate Transparency Act ("CTA") reporting requirements take effect on January 1, 2024. The CTA requires many entities to disclose ownership information to the Financial Crimes Enforcement Network (“FinCEN”).