Corporate Transparency Act Ruled Unconstitutional in Federal District Court Case

March 7, 2024

The Corporate Transparency Act (CTA) is a sweeping and comprehensive law passed by Congress to combat money laundering and other financial crimes by establishing a nationwide database of beneficial ownership information of certain legal entities, as further described here.

On March 1, 2024, a U.S. District Court judge in the Northern District of Alabama ruled that the CTA is unconstitutional because it exceeds the Constitution’s limits on Congress’ power. The court permanently enjoined the defendants, along with any other agency or employee acting on behalf of the United States, from enforcing the CTA against the plaintiffs.

The case at issue, National Small Business United v. Janet Yellen (in her capacity as Secretary of the Treasury), is the first ruling from a federal court opining on the constitutionality of the CTA. The implementation and enforcement of the CTA has received significant pushback from a number of organizations and legal practitioners, in addition to the National Small Business Association.

At this time, continued compliance with the CTA is recommended as the court’s final judgment is limited to the application of the CTA to the plaintiffs in this particular case. Further, it is anticipated that the U.S. government will appeal this decision to the U.S. Court of Appeals for the Eleventh Circuit.

You can find the court’s full opinion here.

We will continue to monitor this case and other related cases currently pending. Please reach out to Ryan Walsh ( and Kyle Shires ( at Croke Fairchild Duarte & Beres with any questions about compliance with the CTA’s requirements.