Bottom Line Up Front (BLUF): The recent appellate ruling on the Corporate Transparency Act (CTA) reaffirms its validity, yet Illinois businesses currently enjoy a temporary pause on enforcement obligations.
Legal Clarity Amidst Ongoing Uncertainty
On December 16, 2025, the United States Court of Appeals for the Eleventh Circuit issued a unanimous ruling in National Small Business United v. U.S. Department of the Treasury, confirming the constitutionality of the Corporate Transparency Act (CTA). This decision overturns a previous ruling from March 2024, which had invalidated the statute, thereby reinforcing its status as federal law. The court emphasized Congress’s authority to enact the CTA, aimed at curbing financial crimes associated with shell companies and money laundering.
Current Enforcement Landscape
Despite the appellate court’s validation of the CTA, Illinois businesses are temporarily shielded from enforcement actions. In March 2025, the U.S. Department of the Treasury issued an interim rule that directs the Financial Crimes Enforcement Network (FinCEN) to focus its enforcement efforts on foreign reporting companies, thereby pausing actions against domestic entities, including those registered in Illinois. This decision reflects ongoing litigation and the need for further regulatory clarity before resuming full enforcement of the CTA.
Compliance Impact
Illinois corporations, LLCs, and limited partnerships must remain vigilant despite the current enforcement pause. Businesses should undertake the following steps during this interim period:
- Identify beneficial owners as defined by the CTA, generally those with significant control or ownership interests.
- Collect and secure necessary information, including full legal names, dates of birth, current addresses, and government-issued identification.
- Monitor any changes in ownership or control to comply with potential future reporting requirements.
- Review data privacy policies and ensure secure handling of beneficial ownership information.
- Coordinate with legal and financial advisors to establish efficient filing practices should enforcement resume.
Preparedness is crucial, as the legal landscape could shift rapidly, reinstating compliance obligations with little notice.
Conclusion
The Eleventh Circuit’s ruling provides important legal affirmation for the CTA, but Illinois businesses must recognize that the current enforcement gap may not last. They should use this time strategically to prepare for possible reinstatement of reporting requirements, ensuring they remain compliant and minimize operational risk.