FEDERAL COURT HOLDS CORPORATE TRANSPARENCY ACT UNCONSTITUTIONAL

In a decision released on Friday, March 1, 2024, Judge Liles C. Burke of the U. S. District Court for the Northern District of Alabama ruled that the Corporate Transparency Act (“CTA”) was unconstitutional.  In the MEMORANDUM OPINION holding the CTA unconstitutional, Judge Burke stated that the Act’s beneficial ownership disclosure requirements which mandate that business entities submit ownership information to the U.S. Treasury Department gave the government “unfettered legislative power.”  The lawsuit, which was filed in 2022 by the National Small Business Association against Treasury Secretary Janet Yellen, sought to block the CTA, alleging the Act was unconstitutional inasmuch as it not only infringed upon state sovereignty, but also violated business owners’ privacy and due process rights.