A US judge has blocked the enforcement of the Corporate Transparency Act (CTA) nationwide, citing concerns over its constitutionality and potential implications on states’ rights. The National Federation of Independent Business (NFIB) filed a lawsuit arguing that the CTA exceeds Congress’s authority over the states, coerces speech, and contradicts the right to anonymous association.
Judge Mazzant ruled in favor of NFIB, stating that the government failed to provide a “tenable theory” supporting the CTA’s constitutionality. The US Department of Justice has since appealed the decision to the Fifth Circuit Court of Appeals.
The Financial Crimes Enforcement Network (FinCEN) has issued a statement indicating that reporting companies will not be required to file beneficial ownership information while the preliminary injunction remains in effect. However, FinCEN warns that companies may still voluntarily submit reports.
The CTA requires companies to report their owners’ details, including name, date of birth, and address. Critics argue that this law invades private information and undermines states’ sovereignty. The government has maintained that the CTA is constitutional, but a US Supreme Court decision could ultimately resolve the matter.
Source: https://www.forbes.com/sites/kellyphillipserb/2024/12/06/fincen-says-corporate-transparency-act-cta-reports-are-voluntary-following-court-decision