Corporate Transparency Act – Appellate Court Update

As you are most likely aware, the federal government passed with bi-partisan support the Corporate Transparency Act (the “Act”). This article is not meant to discuss which companies do and do not have to submit a beneficial ownership interest report with FinCen. I have prepared other articles that can bore you with this information. This article is meant to provide an update as to the constitutionality of the Act.

On March 1, 2024, a court in Alabama held that the Act is unconstitutional. The federal government has filed an appeal. The appellate court held oral arguments in the case on September 27, 2024. As we sit here today, the only companies that do not have to timely submit the required beneficial ownership interest report (the “Report”) under the Act are the plaintiffs named in the lawsuit and the companies that are members of the National Small Business Association prior to March 1, 2024. All other companies are still required to timely submit their Reports under the Act. It is unclear when the appellate court will issue a ruling in this case. Unless the appellate court issues a ruling that applies to the entire USA finding that the Act is unconstitutional, then all small businesses will be required to timely submit their Report.

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As a reminder, for any company created on or after January 1, 2024, the company has 90 days from the date the company was created to timely submit the Report with FinCen. For any company created on or prior to December 31, 2023, then such company has until December 31, 2024 to timely submit its Report. Since we are now in the fourth quarter and it is unclear when the appellate will issue its ruling, it is my opinion that companies should now take the steps to prepare and submit their Report. I will be reaching out to my clients to coordinate the filing of this Report, but do not hesitate to be in contact to further discuss or request assistance.

Do not hesitate to be in contact if you would like to further discuss this appellate court update or any other business issues that you may be dealing with.

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Chris Corpus

Founding Partner at Corpus Law Inc

This article does not provide legal advice or create an attorney-client relationship. If you have any questions or would like to learn more about this topic or if you have other legal questions, do not hesitate to contact Chris Corpus, Esq. of Corpus Law Inc at 216-973-2475. Copyright Christopher A. Corpus 2024.