Corporate Transparency Act: DOJ Appeals Alabama Unconstitutionality Decision to 11th Circuit Court of Appeals; Continued CTA Compliance Recommended

By David H. Freedman and Jordan M. Small

As suggested in our March 4, 2024 blog post, the United States Department of Justice filed a Notice of Appeal on March 11, 2024 to the United States Court of Appeals for the Eleventh Circuit with respect to the March 1, 2024 Alabama federal court decision holding the Corporate Transparency Act (CTA) unconstitutional. 

The Alabama decision is only applicable to the Plaintiffs in that case for as long as the court’s order remains in effect. Under the court’s order, the government is enjoined from enforcing the CTA against the Plaintiffs to the ongoing litigation – Isaac Winkles, reporting companies for which Isaac Winkles is the beneficial owner or applicant, the National Small Business Association, and members of the National Small Business Association. In response to the limited scope of the District Court’s decision, FinCEN issued a notice on its website as of March 11, 2024 stating:

“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. 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.”

Based on the foregoing, absent any applicable court order or position of FinCEN to the contrary, Maddin Hauser is recommending that all non-exempt Reporting Companies subject to the CTA continue to timely adhere to the following deadlines and file its Beneficial Ownership Information Report (BOIR): 

• Existing domestic or foreign Reporting Companies formed before January 1, 2024: On or before January 1, 2025 (one year after the effective date of the CTA).  
• New domestic or foreign Reporting Companies formed during calendar year 2024: Within 90 days after its date of formation (i.e., the filing date of its Articles or Certificate). 
• New domestic or foreign Reporting Companies formed on or after January 1, 2025: Within 30 days after its date of formation (i.e., the filing date of its Articles or Certificate).

Remember that if there is any change to the required information in the BOIR after it has been filed, an updated BOIR must be filed with FinCEN no later than 30 days after the date of the change.

We will continue to follow these developments and provide further updates as they are available on our CTA blog and other social media.