12/12/2024

NFIB Prevails in Blocking Beneficial Ownership Requirements for Small Businesses

The federation's lawsuit challenged the Corporate Transparency

The National Federation of Independent Business (NFIB) recently applauded a decision in the case Texas Top Cop Shop, Inc., et al. v. Garland, et al. at the U.S. District Court for the Eastern District of Texas. The court granted NFIB’s request for a preliminary injunction, blocking the U.S. Department of Treasury from enforcing the Corporate Transparency Act’s (CTA) beneficial ownership information (BOI) reporting requirements.

“This ruling is a huge victory for small businesses nationwide, and just in time” said Beth Milito, executive director of NFIB’s Small Business Legal Center. “For many Main Street small businesses, they were a mere four weeks away from the deadline to file their information in accordance with the CTA. The BOI reporting requirements are a harmful invasion of small business owners’ privacy and a misuse of their valuable time. Thankfully, the Court agreed and granted a preliminary injunction, giving small business owners a reprieve from this burdensome rule.”

NFIB’s lawsuit argues that the CTA is unconstitutional in that it exceeds Congress’s authority over the states, improperly compels speech and contradicts the right of anonymous association guaranteed by the First Amendment, and violates the Fourth Amendment by forcing the disclosure of private information. NFIB partnered with The Center for Individual Rights (CIR) and filed the lawsuit with the Texas Top Cop Shop, Data Comm for Business, Mustardseed Livestock, Russell Straayer and Libertarian Party of Mississippi. Because NFIB and its nearly 300,000 members were a party to this case, the judge blocked enforcement of the BOI reporting requirements nationwide. This reaffirms the power that NFIB members hold when they stand up and speak out in protection of their rights.

NFIB is currently active in more than 40 cases in federal and state courts across the country and in the U.S. Supreme Court.