Small Businesses Brace for Burden: The Corporate Transparency Act’s First Year Takes Toll on Millions of Enterprises

The Corporate Transparency Act (CTA) has been a major burden on small businesses, with 32.6 million expected to be impacted in its first year alone. This legislation requires corporations, Limited Liability Companies (LLCs), and similar entities with 20 or fewer employees and $5 million or less in gross receipts to report their beneficial ownership details to FinCEN. The CTA came into effect on January 1, 2024 and is estimated to have millions of small businesses affected annually thereafter.

The National Federation of Independent Business (NFIB) fully supports the repeal of the CTA as it would relieve small businesses from this burdensome reporting requirement. NFIB believes that this regulation is one of the most significant and troublesome for small businesses. According to Jeff Brabant, NFIB Vice President of Federal Government Relations, the repeal of the CTA is a positive development for small business owners who have been subjected to harsh penalties for minor paperwork violations and have had their sensitive information granted to law enforcement agencies without their consent.

Legislation introduced by Sen. Tommy Tuberville (AL) and Rep. Warren Davidson (OH-08) aims to repeal the CTA, which NFIB believes is irreparable. The NFIB has strongly opposed the Corporate Transparency Act since its introduction and has actively lobbied for its repeal. Small business owners are relieved that their voices are being heard and that there are efforts being made to ease their burden.