In a surprise decision, on March 1, 2024, a federal district court ruled that the Corporate Transparency Act (CTA) is unconstitutional. The CTA currently requires most new and existing corporate entities in the United States to file a Beneficial Ownership Information Report (BOIR) disclosing their beneficial owners and company applicants to the Financial Crimes Enforcement Network (FinCEN).

The scope of the Court’s decision is currently limited only to the plaintiffs in this case. For the time being, the Court’s decision leaves the CTA and BOI landscape in limbo as there is almost certainly going to be further developments in this case. In a recent press release, FinCEN clarified its position that the CTA remains in effect for all other reporting companies.  

The Justice Department, on behalf of the Department of the Treasury, filed an appeal on March 11, 2024.

While this litigation is ongoing, FinCEN will continue to implement the CTA as required by Congress. Other than the plaintiffs and entities subject to the court’s injunction, reporting companies are still required to comply and file their BOIR per FinCEN regulations.