Eleventh Circuit Clears Path for Corporate Transparency Act Enforcement

The Corporate Transparency Act (“CTA”) has cleared a major legal hurdle. On December 16, 2025, the U.S. Court of Appeals for the Eleventh Circuit reversed a lower court decision that blocked enforcement of the CTA, holding that the Act is constitutional and enforceable. Nat’l Small Bus. United v. U.S. Dep’t of the Treasury, No. 24-10736 (11th Cir. Dec. 16, 2025).

Overview of the CTA

The CTA requires certain corporations, limited liability companies and similar entities to report Beneficial Ownership Information (“BOI”) to the Financial Crimes Enforcement Network (“FinCEN”). The Act is intended to combat money laundering, fraud and other illicit activities by limiting the use of anonymous entities and establishing a confidential ownership database accessible to law enforcement and other authorized agencies.

The Court’s Decision

In reversing the lower court, the Eleventh Circuit rejected arguments that the CTA exceeded Congress’s constitutional authority or improperly intruded into state regulation of entity formation. The court concluded that the CTA regulates economic activity with a sufficient nexus to interstate commerce. It also rejected privacy-based challenges, noting that the Act imposes a limited, uniform reporting obligation and includes statutory safeguards to protect the confidentiality of reported information.

Practical Implications

While further litigation is possible, the ruling allows the federal government to proceed with the enforcement of the Act.

The decision follows the regulatory changes in March 2025 that significantly narrowed the scope of CTA reporting. The Treasury’s revised rules exempt all domestic entities and their beneficial owners and focus reporting obligations primarily on certain foreign entities. As a result, significantly fewer entities are currently subject to the CTA than anticipated initially.

What Businesses Should Consider

For entities that are required to report, compliance is ongoing. Updated filings are required when beneficial ownership or control information changes.

Under the March 2025 regulatory scheme, a “reporting company” means an entity formed under the laws of a foreign country that has registered to do business in the United States. Reporting companies are required to file personal identifiable information, including name, address, date of birth and a copy of a valid photo ID.

We will continue to monitor developments and provide updates as guidance evolves. In the meantime, businesses should consult with counsel to assess whether CTA compliance is required under the current regulatory framework.