Nationwide Injunction Halts CTA
FinCEN Suspends Enforcement
The Corporate Transparency Act (CTA), enacted as part of the Anti-Money Laundering Act of 2020, has faced significant constitutional challenges, culminating in a nationwide injunction. As a result, the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) has suspended enforcement of the CTA’s reporting requirements, providing temporary relief to affected businesses.
Corporate Transparency Act
In a significant development, a Texas federal district court has issued a nationwide injunction temporarily blocking enforcement of the Corporate Transparency Act (CTA). This decision, handed down on December 3 in Texas Top Cop Shop, Inc. v. Merrick Garland (Case No. 4:24-cv-478), deems the CTA and its implementing rules likely unconstitutional.
Transit Benefits Required for Illinois Employers
Another wrinkle for employers in the Chicago area.
Businesses located in the six-county Chicago area near public transit routes operated by the Regional Transportation Authority (RTA) that have at least 50 employees will be required as of Jan. 1, 2024, to provide their full-time employees with pre-tax public transit benefits.
Self-certification for veteran-owned and service-disabled veteran-owned small businesses is being eliminated, and a number of other changes went into effect on January 1 as a result of an updated Final Rule from the Small Business Administration (SBA) about these types of awards, details of which will be posted in a new section of the SBA’s regulations.
Until now, only contractors seeking status as either a Veteran-Owned Small Business (VOSB) or Service-Disabled Veteran-Owned Small Businesses (SDVOSB)—defined as 51% or more owned and controlled by a veteran or service-disabled veteran, respectively—competing through the VA’s Veterans First Contracting Program have been required to petition the VA’s Center for Verification and Evaluation to attain qualified status. Going forward, however, self-certification will only be an option for those seeking subcontracts and for goaling purposes.
The updated Final Rule also expands certification eligibility for these classes of small businesses, eliminating the requirement that firms be labeled as “small” in their primary North American Industry Classification System (NAICS) code. After January 1, contractors considered small under any NAICS code listed in its System for Award Management (SAM) profile—not just the primary code—will be considered qualified.
Subchapter V for Small Business Owners
For the past two years, small businesses whose bottom lines were impacted by the onset of COVID-19 enjoyed greater protections while going through Chapter 11 bankruptcy reorganizations in the form of higher debt limits under the Small Business Reorganization Act.
That act, passed in August 2019 and enacted as of February 2020, established what came to be called “Subchapter V” of the SBRA, aimed at providing a simpler, less costly and ultimately more beneficial Chapter 11 process for small business debtors who would struggle to afford administrative and other costs.
Do you need a business license?
In the past two years about 30,000 new businesses were started in Illinois. Most of those new business had to get a specific license for their particular type of business. Not all businesses do, but many will need an Illinois Business License specific to their occupation, which vouches for the fact that you’re qualified to perform a certain type of skill and reassures customers that you will be accountable for your work.
For starters, you will need a Certificate of Registration common to all types of businesses. Then, you will need to drill down to your particular type of occupation, perhaps using this page on the Illinois Department of Financial and Professional Regulation website.
CTA – Federal Reporting Requirements for Small Business
The paper work for many small businesses will be increasing.
Many small businesses with 20 or fewer employees and $5 million or less in gross receipts or sales will be subject to new federal reporting requirements under the Corporate Transparency Act (“CTA”), a section of the National Defense Authorization Act enacted on January 1. This will include both those formed in the U.S., whether through a state or an Indian nation, as well as those formed outside the U.S. but registered to do business here.
Chicago Business Attorney Blog