Update to The Corporate Transparency Act

​On March 1, 2024, a decision was handed down by Judge Liles C. Burke, a Judge of the United States District Court for the Northern District of Alabama, ruling that the Corporate Transparency Act is unconstitutional because it exceeds the federal government’s authority.  The government’s argument for its authority to promulgate the Act was based on the foreign affairs power (since the CTA’s main purpose is to prevent money laundering, especially by offshore actors) and the Commerce Clause.  In light of the fact that the CTA requires reporting by entities that have registered with state Secretaries of State, Virginia State Corporation Commission, Maryland SDAT, regardless of the localized nature of their activities, the court found both of the government’s arguments unconvincing.  I expect the decision will doubtless be appealed to the11th Circuit and the written opinion is unclear whether the holding will be national.  The case is unreported.  The opinion can be found at National Small Business United et. al v. Yellen et. al, Case No. Number 5:22-cv-1448 (N.D. Alabama J. Burke).