Advocacy News – March 5, 2024
What’s New? On Jan. 1, the federal Corporate Transparency Act (CTA) went into effect, which meant most businesses, (although there were 23 exceptions) were required to disclose certain information to the Financial Crimes Enforcement Network (FinCEN). The CTA was implemented to help the federal government crackdown on cases of fraud or terrorism by collecting ownership information.
However, on March 1, the CTA was ruled unconstitutional by the U.S. District Court for the Northern District of Alabama (The National Small Business Association v. Janet Yellen).
Zoom In: The decision emphasized that although the federal government should be concerned and involved in matters related to national security, confidential business information related to incorporation are governed by state law. Furthermore, the court found the CTA to be a governmental overreach on “purely internal affairs.” Because of this decision, the future of the CTA remains unknown.
For more information, check out MI Chamber member Butzel Long’s article recapping the CTA and the details of the decision. For questions, please contact Leah Robinson at LRobinson@michamber.com.