The Corporate Transparency Act (CTA) just cleared a major legal hurdle. On December 17, 2025, the Eleventh Circuit Court of Appeals ruled that the law is constitutional.
This decision reverses an earlier district court ruling. It also sends a clear signal to business owners across the country.
If you own an LLC, corporation, or similar entity, this ruling matters to you. Here’s what you need to know.
Key Takeaways
- The Eleventh Circuit ruled the Corporate Transparency Act is constitutional.
- The CTA requires businesses to report beneficial ownership information.
- Domestic companies are currently exempt under a Treasury interim rule.
- The NSBA may appeal to the Supreme Court.
- Business owners should prepare now for future compliance requirements.
What Did the Court Decide?
The case, National Small Business United v. U.S. Department of the Treasury, challenged the CTA on constitutional grounds. About 65,000 small businesses were part of this lawsuit.
The court found that Congress has the authority to pass the CTA. It falls under the Commerce Clause of the U.S. Constitution.
The judges wrote that the law regulates economic activity. They also said Congress had good reason to believe this activity affects interstate commerce.
Does the CTA Violate Privacy Rights?
The National Small Business Association argued the CTA violates the Fourth Amendment. The court disagreed.
The ruling states the CTA applies uniformly to all reporting companies. There is nothing arbitrary about how it works.
In simple terms, the law treats all businesses the same. That makes it constitutional in the court’s view.
What Is the Corporate Transparency Act?
Congress passed the CTA in 2021. The goal was to fight money laundering, fraud, and terrorism financing.
The law requires certain companies to report beneficial ownership information (BOI). This includes details about the people who own or control the business.
Corporations, LLCs, and similar entities must comply. New companies formed after January 1, 2024, also had to report information about their company applicants.
Are Domestic Companies Currently Required to File?
In March 2025, the Treasury Department issued an interim rule. That rule removed the BOI filing requirement for U.S.-based domestic companies.
However, this does not change the court’s decision. The Department of Justice confirmed the interim rule is an executive action. It does not affect whether the CTA itself is constitutional.
Business owners should stay alert. The rules could shift again depending on future agency guidance or legislation.
What Are Business Groups Saying?
Reactions to the ruling are mixed.
The National Small Business Association expressed disappointment. Its president, Todd McCracken, called the CTA an unfair burden on small businesses. The group is now exploring an appeal to the U.S. Supreme Court.
On the other side, the FACT Coalition praised the decision. Deputy Director Erica Hanichak said the ruling confirms what Congress intended. Anonymous shell companies enable serious crimes, and this law helps stop that.
Could the CTA Still Be Repealed?
Yes, it’s possible. The NSBA is pushing Congress to pass legislation that permanently repeals the CTA.
At the same time, the legal team behind the lawsuit may seek Supreme Court review. That process could take months or even years.
For now, the law stands. Business owners should prepare for potential compliance requirements down the road.
What Should Business Owners Do Now?
Even with the current pause on domestic BOI filings, it’s wise to stay prepared. Here are three steps you can take today.
- Gather Your Ownership Information< Know who owns 25% or more of your company. Collect their names, addresses, dates of birth, and ID numbers.
- Review Your Entity Structure Make sure your business records are accurate and up to date. This includes operating agreements and formation documents.
- Talk to a CPA Who Understands Compliance A qualified advisor can help you stay ahead of changing rules. Don’t wait until deadlines return.
How Virtue CPAs Can Help
At Virtue CPAs, we help small and midsized businesses navigate complex compliance issues. The CTA is just one example of how tax and regulatory rules continue to evolve.
Our team stays on top of these changes, so you don’t have to. Whether you need help with entity structuring, tax planning, or BOI readiness, we’re here for you.
Ready to talk? Schedule a consultation with Virtue CPAs today. Let’s make sure your business is prepared for whatever comes next.
