NEWS: Nationwide Injunction Issued Against the Corporate Transparency Act: What You Need to Know
Major Update as of December 3, 2024:
If you own a small business, LLC, or startup, here’s critical news: the Corporate Transparency Act (CTA) is currently on hold nationwide due to a recent court decision. For now, businesses are not required to file Beneficial Ownership Information (BOI) reports, but this could change pending further legal developments. Let’s break this down clearly and discuss what it means for you.
What Happened?
On December 3, 2024, the U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction against the enforcement of the CTA and its reporting rules. This decision came in response to the case Texas Top Cop Shop, Inc. et al. v. Garland, where plaintiffs argued that the CTA overstepped constitutional limits.
The ruling effectively means that reporting companies—including small businesses, startups, and single-member LLCs—do not have to comply with CTA requirements, at least for now. The injunction specifically blocks the upcoming January 1, 2025, deadline for BOI filings.
What is the Corporate Transparency Act (CTA)?
Enacted to combat money laundering and illicit financial activities, the CTA requires most U.S. companies to disclose information about their “beneficial owners”—individuals who:
Own or control at least 25% of the company
Exercise significant control over company operations
The CTA mandates businesses to file BOI reports with the Financial Crimes Enforcement Network (FinCEN), including personal details like full names, birth dates, and addresses.
This reporting requirement applies broadly, covering:
Small Businesses: LLCs, corporations, and other entities registered to do business in the U.S.
New Companies: Entities formed on or after January 1, 2024 (filing deadlines are typically within 90 days of formation).
Why the Court Issued a Nationwide Injunction
In its ruling, the court found the CTA likely unconstitutional on two major grounds:
Commerce Clause: The court ruled that the CTA represents an unjustified expansion of Congress’s power to regulate interstate commerce.
Necessary and Proper Clause: The court stated there was no specific enumerated power in the Constitution that could justify the CTA’s requirements.
The decision also cited concerns under the Tenth Amendment, emphasizing that the federal government had overreached by imposing reporting requirements on businesses.
The court’s nationwide injunction is significant because it applies to all businesses across the country, not just those involved in the Texas lawsuit.
What Does This Mean for Small Business Owners Right Now?
As of today:
No BOI Filings Required: Businesses are not obligated to comply with the CTA’s reporting rules or submit BOI reports.
January 2025 Deadline Stayed: The deadline for companies formed prior to January 1, 2024, is on hold.
New Companies Impacted: Entities formed in 2024 that would have been subject to 90-day filing deadlines are also included in this injunction.
However, this is a preliminary ruling. Here’s what to expect:
Government Appeal Likely: The government may appeal this decision and seek to reinstate the CTA.
Ongoing Legal Developments: If the injunction is overturned on appeal, businesses could once again face BOI reporting requirements.
What Should You Do Now?
Stay Informed: The situation is evolving, and legal challenges to the CTA are ongoing. Keep an eye on updates about the appeal process and future rulings.
Prepare, Don’t Panic: While compliance is not currently required, businesses should still get familiar with the CTA requirements. If the injunction is lifted, BOI filings could come back into effect quickly.
Gather information about beneficial owners.
Understand how the CTA applies to your business structure.
Consider Legal Advice: If your business has a complex ownership structure, consult a legal advisor to ensure you’re ready to file BOI reports if the injunction is reversed.
CTA Update: Where We Stand as of Today
The January 1, 2024 CTA compliance date initially required BOI filings for all qualifying entities.
The March 1, 2024 Alabama ruling declared the CTA unconstitutional but did not block its enforcement nationwide.
The December 3, 2024 Texas court ruling is the first to impose a nationwide injunction, pausing the CTA’s enforcement for all businesses.
If the injunction holds, the government may need to adjust or completely revise the CTA. For now, this is a critical reprieve for small businesses, especially those concerned about privacy and administrative burdens.
What’s Next?
This battle over the CTA is far from over. If the government appeals the decision, the injunction could be lifted, and reporting requirements could quickly come back into play. If the courts ultimately strike down the CTA, Congress may attempt to pass revised legislation with narrower reporting obligations.
Key Takeaways for Entrepreneurs and Small Business Owners:
No Action Required Today: You do not need to file BOI reports under the CTA right now.
Monitor Developments: The CTA’s status could change if the government appeals or the courts issue further rulings.
Be Ready: Familiarize yourself with the BOI reporting process so you can comply quickly if the injunction is lifted.
Consult Experts: If you’re unsure how this impacts your business, seek legal advice to stay prepared.
Final Note
The CTA represents one of the most significant reporting requirements for small businesses in recent years. Whether you’re an entrepreneur, freelancer, or startup founder, this ruling offers temporary relief but demands vigilance. Staying informed and ready will ensure your business remains compliant—no matter what happens next.
For further updates and actionable advice, continue to follow developments here at Urban Freedom Magazine, your trusted resource for navigating the ever-changing business landscape.
Purpose-Driven Entrepreneurship: A Needed Check-in for Business Owners
Being a purpose-driven business owner is like taking your business on a meaningful adventure. It's not about chasing after the cash – it's about uniting your business with a mission or cause that speaks to you and your audience will always find you. Whether you're all about bettering food-disparaged communities, fighting for social justice, or solving a problem that improves the quality of life, purpose-driven entrepreneurs are business visionaries with a heart to serve and who leave a positive mark on the world. It's all about making a difference, and that's what gets us out of bed in the morning!
Purpose…
I define “Purpose” as what we are uniquely positioned to do. Purpose-driven entrepreneurs should ask themselves: what are you—given your passions, experiences, and skills—able to do to make this world better?
Everyone has a purpose; however, the question is whether you are aware of it and hustling to bring it to fruition. If you are clear on what and how you want to make the world a better place, then your opportunities to do so are endless. Your purpose can show up in how you treat your employees, where you source from, how you make decisions, where you are located, how you market, who you partner with, and how you use your platform.
My book and keynote address offers practical and accessible steps on how to live within your purpose. One that I would focus on in this article is: to be clear on what your purpose is. Write it down and share it with other people. Incorporate it into your culture. Don’t just say it, but help people to use it to make decisions within the company. When members of my team ask, “Well, what decision is most aligned with our purpose?” is when I realize I have been successful at infusing an organization with purpose.
Contributor: Deanna Singh Author & Chief Change Agent at Flying Elephant
So, what is a Purpose-Driven Entrepreneur...
To be a purpose-driven entrepreneur is to be an entrepreneur who understands their “Why”. An entrepreneur who understands their “Why” will be resilient and focused even through challenging times. The answer to their “Why” acts as a compass and drives the decisions, and by extension, the direction of their life and company.
When many think of a purpose-driven entrepreneur they think of a social entrepreneur such as a company on a mission to impact a social or environmental cause like poverty eradication or provision of clean water. However, this is a misconception because there are social entrepreneurs with no purpose. Shocking? But yes, that’s true. The purpose is the song in our hearts that drives us even after the instruments have been put away. Each of us was born with a different song in our hearts that only we can sing. As an entrepreneur, your company will answer the question “Why” in a unique way that cannot be duplicated.
Your company’s purpose can be as simple as making people smile every day or it can be as complex as revolutionizing the way people think about space.
The common theme is that it is uniquely yours.
Google for example has documented its mission and integrated it into its business goal alongside perception. “Our mission is to organize the world’s information and make it universally accessible and useful.” Their purpose led them to where they are today and inherently to where we are today.
Identify your Purpose. It’s okay if you’re unsure but now is the time to put intentional thought and give yourself the space to explore to identify it.
Recognize distractions as distractions. There will always be distractions posing as great opportunities.
Before you make a decision, ask yourself what decision will align with your Why.
Write down your Why and review it daily.
Surround yourself with constant reminders of your Why.
Contributor: Krystal Nelson Founder, i impakt, LLC Https://iimpakt.com/
How to Be a Purpose-Driven Business Owner:
Define Your Purpose: Start by reflecting on what truly matters to you. What causes or issues ignite your passion? Your purpose should be authentic and deeply connected to your personal values.
Integrate Purpose into Your Business Mission: Craft a mission statement that clearly articulates your purpose. Ensure it becomes the guiding principle for your business decisions, operations, and long-term goals.
Engage Your Team: Share your purpose with your team and involve them in discussions about how the business can contribute to a greater cause. A shared sense of purpose fosters a collaborative and motivated work environment.
Embrace Sustainability: Consider the environmental and social impact of your business practices. Implement sustainable initiatives and responsible business practices that align with your purpose.
Benefits for your Company & Customers
Every business has the opportunity to serve its customers and leave a positive impact on the world, whether they're building orphanages or designing t-shirts. A t-shirt design business that creates designs that question the traditional norms or incites a movement uniting groups of people can be purpose-driven because their purpose is at the root of what they do and why they do it. It's not just about the money. It's about the impact they're having and the value they're adding to their customers' lives.
It's not enough to just create a company with a strong purpose. A true purpose-driven entrepreneur must live and breathe that purpose every day.
Every action taken by the company should go back to the overall purpose and the core values, and the team should continually assess everything they do against the benchmark of that purpose.
Over time, that purpose may evolve or take on different forms, but it's crucial to continually gain clarity on the purpose. To remain purpose-driven, the business must continually keep a pulse on its purpose, thread messages of its purpose into all communications, and revisit its purpose often to make sure that it still rings true for the business.
Contributor: Annie Dickerson -Goodegg Investments https://www.goodegginvestments.com
Benefits for the Owner, Team, and Customers:
Personal Fulfillment: As a purpose-driven entrepreneur, you'll experience a deep sense of satisfaction, knowing that your efforts are contributing to positive change. This personal satisfaction can fuel your motivation and strength.
Team Morale and Productivity: A purpose-driven approach creates a sense of meaning for your team members. When employees feel that their work has a greater purpose, morale, and productivity increase, fostering a more dedicated and engaged workforce.
Customer Loyalty: In an era where consumers increasingly respect honorable and socially accountable businesses, aligning your brand with a purpose can build strong relationships with your customer base. This loyalty translates into repeat business and favorable word-of-mouth marketing.
Being a purpose-driven entrepreneur is not a trend; it's a transformative mindset that can shape the success of your business. Let’s be real, those who pursue it as a trend rarely last or succeed honestly. When people say something requires “heart” this is it! Just as well, you also must diligently prepare finances and plans to ensure those relying on the mission aren’t without poor planning.
By defining your purpose, integrating it into your mission, and embracing sustainable practices, you'll not only experience personal fulfillment but also inspire and positively impact your team and customers. As a business owner with purpose, embrace the power of discernment adding the wind to your sail, and watch your business flourish in the present and setting an example for those to come, all while paying it forward.
"Mastering Delegation: How I Overcame the Fear of Obsolescence and Built the Company of My Dreams"
Contributor: Sarah Spitsen CEO of Feya Candle Co
I've been a solopreneur for about 10 years. Always prided myself on reciting my dad's old mantra of “if you want it done right, do it yourself”.
However, my business grew over the years, but not at the rate I would’ve wanted it to.
Fast forward to 8 years in business, I have a few employees, we're on the brink of a growth spurt and my husband and I realized that I was pregnant. I went into a panic at the thought of taking maternity leave - this surely means that if I have to embark on one; I'll go out of business. So, to cure this complete work panic, I started working with a business coach with one goal in mind: in 9 months, delegate all tasks in the company.
I succeeded in this goal, and my one fear of becoming obsolete in my own company was completely squashed when I came to the realization that when I step out of my company, I get to truly work on the vision. No more creating the company but taking 90% of my time to do the tasks, I now get to run the company I've always wanted. We’ve grown exponentially and my employees are staying longer and are more dedicated than any employees I've ever had.
When learning what roles to delegate
Take one step at a time. When you're the 'everything' for your company it can seem overwhelming to delegate, however when you identify your employee strengths and one by one assign them tasks within their achievement zone; it will start to become a routine rather than a daunting task. Nowadays many tasks can be automated or programs that have changed the game, down to automated business travel expense tracking with AI-integrated planning (exclusive business hotel and flight deals too), which lifts a heavy load from any accountant. You may even use an automated platform for your annual business filings.
If I'm delegating a lot, I take one major 'part' of my job at a time, break it down on paper, and over a week to two weeks, slowly start to train my employees on each task one by one to ensure I don't load too much on them (or me) at once. This also allows time, if the employee is not suited for the task, to move it to someone else.
Lastly, the best way to know WHAT to delegate! The moment I feel either overwhelmed by my job, or I’m embarrassed with how many tasks I didn't get done within a period of time, I know I need to delegate. I look for the tasks I'm not completing to the best of my ability and I delegate at least half of them. If in a few weeks time I'm still not getting the remainder of the tasks done, those will have to be delegated too.
Choosing the right team member for the task
I mandate all employees to take an enneagram test when they come into the company (there are also SAFETY tests, DISC assessments, Gallup strengths finders etc), this makes it possible for me to know them beyond the interview stage where everyone puts their 'best foot forward'. I further understand how they communicate, how they are motivated, and how they react to situations, this knowledge has been essential to finding what tasks fit them best.
Teamwork Project Management
My team also operates remotely around the USA, so I keep weekly catch up calls with each one - always with their Enneagram results in front of me.
This constant communication and accountability allows me to talk through everything I've delegated to them and ensure things are being handled the right way.
Step 1: Self-awareness and Task Assessment
Before you can effectively delegate, it's crucial to understand your strengths, weaknesses, and the tasks that require your unique skill set. Conduct a thorough self-assessment and identify tasks that align with your expertise and those that can be handed over to others. This foundational step sets the stage for a more strategic delegation process.
Step 2: Identify Competencies in Your Team
Knowing your team's strengths and capabilities is essential for successful delegation. Assess the skills and expertise of each team member to match tasks with the most qualified individuals. Consider their past experiences, training, and current workloads to ensure a balanced and efficient distribution of responsibilities.
Step 3: Clearly Define Tasks and Expectations
Effective communication is key when delegating tasks. Clearly define the tasks you're assigning, including specific deliverables, deadlines, and any relevant details. Make sure your team understands the importance of their roles and how their contributions contribute to the overall success of the project or business.
Step 4: Empower and Provide Resources
Delegating is not just about assigning tasks; it's about empowering your team to take ownership of their responsibilities. Provide the necessary resources, tools, and training to ensure they have everything needed to excel in their assigned roles. This not only boosts their confidence but also enhances overall team performance.
Step 5: Establish a Feedback Loop
Encourage open communication by establishing a feedback loop. Regular check-ins and updates create a supportive environment where team members can ask questions, seek guidance, and share progress. Be open to providing constructive feedback and recognize their achievements, fostering a positive delegation culture.
Encouragement and Mindset Shift:
Delegating can be challenging, especially if you're used to handling everything yourself. However, it's essential to recognize that effective delegation is a sign of strong leadership. Trust your team, believe in their abilities, and acknowledge that sharing responsibilities leads to collective growth.
Lastly, I usually ask my employees what they “want” to do! I firmly believe in hiring individuals smarter and better than you so when they come into the company, they first get to pick their own job title (another great way to better understand how they see themselves and operate), then they get to tell me what their ideal work day would look like. Although I can't promise their perfect work day every day, this question gives me an insight on what they're motivated to do, and what they'd truly put their heart into. I try to assign them more tasks in their passion, than not, so overall they're motivated to have a great work day, every day.
Sarah Spitsen Chief Candle Lady & Food Giver
Feya Candle Co
hello@feyacandle.com
(402) 413-0068
FAQ:
1. How did you overcome the fear of becoming obsolete in your own company?
I successfully overcame this fear by realizing that stepping out of the day-to-day tasks allowed me to focus on the bigger vision for the company. Now, I get to run the company I've always wanted, leading to exponential growth and increased dedication from my employees.
2. What advice do you have for those learning to delegate tasks?
Start by taking one step at a time. Identify your employees' strengths and assign tasks within their achievement zone. Delegating becomes a routine when you break down your responsibilities, train employees gradually over a week or two, and avoid overloading them or yourself. This approach also provides flexibility to reassign tasks if needed.
3. How do you decide what tasks to delegate?
Whenever I feel overwhelmed or notice a decline in task completion quality, it's a signal to delegate. I identify tasks that I'm not excelling at and delegate at least half of them. If, after a few weeks, I still struggle with the remaining tasks, those too are candidates for delegation.
4. How do you choose the right team member for a specific task?
I mandate employees to take personality tests like the enneagram, SAFETY tests, DISC assessments, Gallup strengths finders, etc., during onboarding. This goes beyond the interview stage, providing insights into communication styles, motivations, and reactions to situations. This knowledge is crucial in assigning tasks that align with each team member's strengths and preferences.