2024-09: Court rules on beneficial ownership reporting requirements

A U.S. District Court has ruled that FinCEN’s beneficial ownership reporting mandate enacted as part of Corporate Transparency Act (Public Law 116-283) constituted Congressional overreach and therefore is unconstitutional and cannot be enforced against the plaintiffs who brought the case.  (National Small Business United v. Yellen (March 1, 2024) U.S. Dist. Ct., North. Dist. Of Ala., Case No. 5:22-cv-1448-LCB)

The plaintiffs are Isaac Wilkes, a small business owner, and National Small Business United, a trade organization representing 65,000 members, including Isaac Wilkes.

In a press release issued on March 4, 2024, FinCEN stated that in compliance with the court’s order, it will not enforce the beneficial ownership reporting requirements against the plaintiffs, indicating that all other reporting companies are still subject to the reporting mandate.

This means that unless a business is a member of the National Small Business United, it must still comply with the reporting mandate. For additional information concerning the reporting requirements, see our January 2, 2024, flash e-mail “FinCEN releases beneficial ownership information report.

The court’s decision is available at: www.govinfo.gov/content/pkg/USCOURTS-alnd-5_22-cv-01448/pdf/USCOURTS-alnd-5_22-cv-01448-0.pdf

FinCEN’s news release is available at: https://fincen.gov/news/news-releases/updated-notice-regarding-national-small-business-united-v-yellen-no-522-cv-01448

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