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ARTICLE · 26 MARCH 2024

Federal District Court Rules Corporate Transparency Act Unconstitutional

Crowell & Moring LLP
Crowell & Moring LLP
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On March 1, 2024, the U.S. District Court for the Northern District of Alabama (the "Court") issued an opinion declaring the Corporate Transparency Act ("CTA") unconstitutional.

United StatesGovernment, Public Sector
Anand Sithian
Anand Sithian
Caroline E. Brown
Caroline E. Brown
Kelsey Clinton
Kelsey Clinton

What You Need to Know

Key takeaway #1

The government has appealed the decision and FinCEN has stated that it will comply with the Court's ruling as to the named plaintiffs, as well as members of the National Small Business Association (as of March 1, 2024); those entities are not currently required to report BOI to FinCEN.

Key takeaway #2

The Court did not issue a nationwide injunction halting the CTA's enforcement against all Reporting Companies, meaning the CTA remains in effect (for now) as to entities other than the named plaintiffs and NSBA members as of March 1, 2024.

Key takeaway #3

Other businesses and plaintiffs may use this ruling to file similar challenges seeking a nationwide injunction of FinCEN's enforcement of the BOI requirements under the CTA.

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