FinCEN continues to implement the Corporate Transparency Act

Under the Corporate Transparency Act (CTA), many businesses had to begin complying with new reporting requirements on January 1, 2024. But on March 1, 2024, the US District Court for the Northern District of Alabama ruled that the CTA is unconstitutional.

Does that mean that businesses no longer have to comply? Unfortunately, that's not the case for those who would like to skip the requirements.

The federal government filed an appeal on March 11, 2024, in the US Court of Appeals for the 11th Circuit. That same day, the Financial Crimes Enforcement Network (FinCEN) announced that the law's requirements are still in effect for those not involved in the court case. 

"While this litigation is ongoing, FinCEN will continue to implement the Corporate Transparency Act as required by Congress, while complying with the court's order," FinCEN stated. "Other than the particular individuals and entities subject to the court's injunction... reporting companies are still required to comply with the law and file beneficial ownership reports as provided in FinCEN's regulations."

Under the CTA, certain companies must provide information related to their "beneficial owners" - the individuals who ultimately own or control the company - to FinCEN. Failure to submit a beneficial ownership information (BOI) report may result in civil or criminal penalties, or both.

To learn more about CTA reporting, keep reading here.