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On Friday, March 1, 2024, Federal District Court Judge Liles Burke of the US District Court for the Northern District of Alabama issued a ruling on National Small Business United d/b/a National Small Business Association v. Yellen, in which the Court found that the Corporate Transparency Act (CTA) is unconstitutional “[b]ecause the CTA 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…”

On Monday, March 4, 2024, the Treasury released a statement that as a result of the ruling, it will not enforce the CTA against the plaintiffs in the case: the National Small Business Association (NSBA), NSBA members and Isaac Winkles, an NSBA member and small business owner. While it is expected that the government will appeal, the Treasury did not indicate that it will delay implementation for other filers as the case moves its way through the courts. Therefore, it is advisable for all others considered reporting companies under the CTA to continue to comply with the CTA filing requirements in the interim.

We will continue to monitor developments related to the CTA and its implementation. Please reach out to our Family Office and Strategic Investment Practice Group with any questions.