Valued Clients, 

This email is to update you about a recent development concerning the Corporate Transparency Act (CTA) and reassure you that Seth & Alexander is closely monitoring the situation to keep you informed. 

  

On March 1, 2024, a U.S. District Court judge in Alabama ruled that the CTA is unconstitutional. This act, enacted on January 1, 2021, directed the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) to establish a nationwide database of beneficial ownership for certain corporations and legal entities. 

  

The lawsuit was filed by the National Small Business Association (NSBA) and one of its members in November 2022, seeking a permanent injunction against the implementation of the CTA and FinCEN’s reporting rules. The judge's ruling cited that the CTA "exceeds the Constitution’s limits on the legislative branch" and fails the "necessary and proper" test. 

 

 As your trusted advisors, Seth & Alexander is actively monitoring this litigation and its potential implications. We are committed to keeping you informed about any developments that may affect your business operations or compliance requirements. 

 

We do expect the government to appeal this decision which means it may not be final and therefore we are monitoring the situation and will update you accordingly. 

 

Rest assured that we will continue to provide updates as the situation unfolds. If you have any questions or concerns about how this ruling may impact your business or regulatory obligations, please contact us. 

 

Thank you for entrusting Seth & Alexander with your business needs. We appreciate your partnership and look forward to assisting you through any challenges that may arise. 

  

Best regards, 

  

Seth & Alexander