NFIB files lawsuit challenging Corporate Transparency Act

On Tuesday, the National Federation of Independent Businesses (NFIB) filed legal action to challenge legislation regulating beneficial ownership reporting.

The lawsuit argues that the Corporate Transparency Act (CTS) oversteps Congressional authority and creates an undue burden on small business owners. The bipartisan Corporate Transparency Act, enacted in 2021 to curb illicit finance, requires many companies doing business in the United States to report information about the individuals who ultimately own or control them. The lawsuit was filed in United States District Court for the Eastern District of Texas.

“The Corporate Transparency Act created one of the largest reporting requirements for small businesses,” said Beth Milito, Executive Director of NFIB’s Small Business Legal Center. “Small businesses are at risk of being subjected to civil and criminal penalties for simple paperwork violations and must give every level of the government access to private and sometimes confidential information of millions of small business owners. The CTA is unconstitutional, and we ask the Court to prohibit the Treasury Department and FinCEN from enforcing the Act and beneficial ownership requirements.”

NFIB’s suit also said that the legislation improperly compels speech and burdens associations; unconstitutionally compels disclosure of private information and is not in accordance with the law. The lawsuit was filed with the Texas Top Cop Shop, Data Comm for Business, Mustardseed Livestock, Russell Straayer, and the Libertarian Party of Mississippi.

NFIB said it supports the Repealing Big Brother Overreach Act which would repeal the CTA and offer relief to small businesses in terms of beneficial ownership requirements.

The post NFIB files lawsuit challenging Corporate Transparency Act appeared first on Financial Regulation News .