Please note that there has been significant development with respect to the Corporate Transparency Act and your reporting responsibilities as it relates to the Dec 31, 2024 filing deadline.  

A recent federal court ruling in the State of Texas has intensified the debate over the Corporate Transparency Act (“CTA”), a law requiring businesses to disclose beneficial ownership information to the Financial Crimes Enforcement Network (“FinCEN”). The court ruled the CTA is unconstitutional, arguing that it exceeds Congress’s authority under the Commerce Clause and does not qualify under the Necessary and Proper Clause. The judge highlighted that the act of incorporation is traditionally a state matter, making the CTA’s reach excessive and unjustified. 

Although this comes as good news, it is important to point out that the judge’s injunction order temporarily exempts only the plaintiffs involved in that particular court case; it does not yet apply nationwide. For that reason, our professional recommendation is for businesses to continue compliance with the CTA until it has been fully and finally been ruled unconstitutional. However, the ruling has sparked significant concern and could influence broader enforcement across the U.S. FinCEN has appealed the decision and the outcome of that case could very well shape the future enforceability of the CTA and other corporate transparency laws across the country. 

McGovern Law will be monitoring this situation closely and will keep you posted about notable developments. If you have any questions about how this impacts your business, please reach out to us today. Non-compliance with CTA obligations may result in significant penalties.