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Yesterday I received an interesting email from Cody Lawson, one of brightest and well-educated Corporate Analyst here at NCH. The title of the article he shared was from a law firm, titled: “Corporate Transparency Act Declared Unconstitutional: How does this Impact Your Company?”
Please read this entire post, I don’t want you to be misled by the title of this article!
As a reminder, the government implemented the Corporate Transparency Act in an attempt to cut down on nefarious actors that use corporate entities to commit fraud, terrorist activities, and money laundering. The new law requires all entities that you own or control 25% or more to register with the federal database maintained by FinCEN.gov. For any company formed before January 1st, 2024, you have until December 31st of 24 to register with FinCEN. For entities formed on or after January 1st, 2024, you’re given 90 days to comply.
Here’s where it gets interesting. March 1st, 2024, a federal court declared the Corporate Transparency Act (CTA), was unconstitutional citing a violation of the First, Fourth, and Fifth Amendments of the US Constitution. The court held that Congress lacked the constitutional authority to enact the CTA.
However, this ruling technically only applies to the named plaintiffs of the case, which are the 65,000 members of the National Small Business Association (NSBA).
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If you’re part of the NSBA, you win. If not, as it stands currently, you and I will still have to comply with this new law. In my opinion, this ruling will most likely go to an appeals court. If you’re one of those people who have been waiting to file your Beneficial Ownership Report with FinCEN, your procrastination may end up serving you well. As discussed in earlier articles, the penalty is $500 per day for those not complying.
If you’re a client of NCH, we will of course keep you up to date and help you maintain compliance. NCH can help you with forming LLC’s and Corporations, land trusts, estate planning, tax & accounting for business owners and investors, business credit, and self-directed IRA’s and Solo K’s. Let us know if you have any questions or need support!
With NCH, the state’s top business formation service, you can register your LLC in Nevada quickly and easily. Our specialists will help you choose the right entity for your company and understand why an LLC in Nevada is your best option. We’ll assist you with all necessary Nevada LLC forms, including the vital Articles of Organization, and help you comply with state regulations. In addition, we offer expert assistance with tax compliance, credit building, and payroll management. Schedule a private consultation to explore effective solutions to minimize tax liabilities and protect your wealth. Start unleashing your LLC’s full potential today with NCH. Schedule a consultation with Adam Kintigh today!
DISCLAIMER: The above material has been prepared for informational purposes only, containing opinions of the provider, and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. Please consider consulting tax, legal, and accounting advisors before engaging in any transaction.