Is the Corporate Transparency Act Unconstitutional?

On March 1, 2024, a U.S. District Court judge in Alabama in a fifty-three-page opinion ruled that the Corporate Transparency Act (“CTA”) is unconstitutional because it “exceeds the Constitution’s limits on the legislative branch and lacks a sufficient nexus to any enumerated power to be a necessary or proper means of achieving Congress’ policy goals.” Nat’l Small Bus. United v. Yellen, 2024 U.S. Dist. LEXIS 36205 (N.D. Ala. 2024).

The Court’s decision stayed any CTA reporting requirements for the Plaintiffs in that case only. Because the Court found the CTA unconstitutional on this ground it did not address any of the other constitutional challenges.

This decision will not be the end of the matter because:

  •  The U.S. government is likely to appeal this decision and may seek an interim stay of the ruling from both the trial and appellate courts;
  • It is possible that this ruling will inspire suits in other districts;
  • FinCEN may offer comments about the impact of the ruling on CTA implementation and enforcement in the coming days;
  • This case only applies in the Northern District of Alabama. It is not precedent for any other jurisdiction.

Entities currently required to file a beneficial ownership interest report shall continue to be required to do so.

The Lynch Law Group, LLC, will continue to monitor this litigation and its implications for the future of the CTA.

If you have any questions about corporate compliance, email Daniel P. Lynch or Eric A. Thomas at

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