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Corporate Transparency Act: To File or Not to File?

December 23, 2024

Thomas C. Carey | Partner, Business Chair View more articles

Thomas is a member of our Business Practice Group

Photo credit: Mikkelwilliam via Getty Images

The Corporate Transparency Act (CTA) requires most small companies doing business in the United States to disclose information about their beneficial owners to the Financial Crimes Enforcement Network (FinCEN), by January 1, 2025. In April 2024, we reported on an Alabama district court case that held the CTA to be unconstitutional. That ruling was of limited geographic scope.

On December 3, 2024, the U.S. District Court for the Eastern District of Texas granted a nationwide preliminary injunction that enjoins the federal government from enforcing the CTA. The district court reasoned that the CTA is probably unconstitutional because it falls outside of the legislative powers of Congress.

On December 23, 2024 the U.S. Court of Appeals for the Fifth Circuit stayed the district court’s decision. The challengers may seek further review of the decision, including a possible appeal to the Supreme Court. And there are other courts considering challenges to the CTA.

On December 24, 2025, FinCen issued a statement extending the filing dealing for companies formed prior to 2024 until January 13, 2025. The same deadline applies to most companies formed between September 4, 2024 and December 2, 2024. Companies formed on or after December 3, 2024 have 21 days to file. Companies that do not file on time may be subject to fines of up to $591 per day for non-compliance unless they file by then.

If you are a Sunstein client and have questions about this law and its applicability to you, feel free to contact me at tcarey@sunsteinlaw.com.