{3 minutes to read}  If you're a business owner, you may have heard that the Corporate Transparency Act was deemed unconstitutional by a Federal court in Alabama, and you're right. How does that case apply to you and your business' obligation to comply with the Corporate Transparency Act? 

My name is Katherine Taylor, and I'm going to give you my take on the current situation. So, as you may know, the Corporate Transparency Act went into effect on January 1, 2024. On March 1, 2024, a Federal trial court in Alabama found that Congress exceeded its powers when it enacted the law and so it deemed the law unconstitutional.

Now, the kicker is that that case, by its terms and according to FinCEN (FinCEN has published a little guidance on its take on the case), only applies to the plaintiffs in that action, who are one individual business owner and the members of the National Small Business Association. As of March 1, 2024, if your business isn't or wasn't a member of the National Small Business Association, then the case does not apply to you. That means that FinCEN can still enforce the law against you and every other business not a member of that Association.

So, again, what does that mean? What we do know is that the case has either already been appealed or will be appealed shortly to a Federal Circuit Court and then likely will go to the Supreme Court of the United States. When it comes to the Supreme Court, the decision could well affect every business in the country. So, you could be thinking — well, I'm just going to wait.  My suggestion is don't wait because the legal system moves very slowly, and it could take a long time before that case gets to the Supreme Court.

Regardless, you still have a certain amount of time to comply with the Act. So again, if you're a business formed before January 1, 2024, you still have until January 1, 2025, to comply. And if you're a new business formed on or after January 1, 2024, you have 90 days to comply. So my suggestion is, unless you are a member of the National Small Business Association, comply with the Act and wait to see what happens with the Supreme Court decision if it gets that far.

As always, you can call us if you have any questions. Our contact information is below. Thank you.