A federal appeals court decision on December 26 has provided relief to small businesses by putting the new nationwide beneficial ownership information (BOI) reporting requirements on hold. This pause comes as a result of a lawsuit filed by the National Federation of Independent Business (NFIB), which challenges the constitutionality of the Corporate Transparency Act (CTA). The court's decision nullifies an earlier Fifth Circuit order that allowed enforcement of these requirements.

Rob Smith, Senior Attorney of NFIB’s Small Business Legal Center, stated, “The court’s reinstatement of the nationwide injunction is a welcome sigh of relief for small businesses. Since being told earlier this week that they must urgently submit their BOI reports, our nation’s small businesses have experienced enormous chaos and confusion. Thankfully, the court’s latest decision recognizes that the CTA and BOI reporting requirements pose serious constitutional questions.”

Currently, most small businesses are not required to comply with these BOI reporting requirements while the courts continue to review the case titled Texas Top Cop Shop, Inc., et al. v. Garland, et al. However, if the CTA is not fully repealed or declared unconstitutional, approximately 32 million small businesses across the country could be affected by this statute.

The NFIB supports legislation known as the Repealing Big Brother Overreach Act, which aims to repeal the CTA and permanently relieve small businesses from these obligations. They urge Congress to take decisive action to repeal what they see as an unnecessary requirement.

Small business owners are encouraged to contact their representatives in Congress to express their support for repealing the CTA.