As we shared with you here, Congress recently passed the Corporate Transparency Act requiring small businesses to disclose personal information about their owners to the federal government. Earlier this month, the US District Court for the District of Alabama said the new law is unconstitutional on privacy grounds. The federal government has appealed the decision to the US Court of Appeals for the Eleventh Circuit. Meanwhile, enforcement of the law is suspended only as it applies to the plaintiffs in the lawsuit. All other business owners, including the Indie Business Network members to whom the law applies, must still comply with the law.
Essentially, the law requires most small business owners to disclose to the federal government certain identifying information about the “beneficial owners” of their businesses within a certain time period after the business is formed with the state in which it is registered. Failure to comply can result in significant financial penalties and even imprisonment — which of course is absolutely ridiculous.
We will continue to track this issue and keep you updated.
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This video from the US Department of Treasury provides a high level overview of the Corporate Transparency Act and the BOI reporting requirements.
