What you should expect as a small business owner who was worried about complying with the FinCEN reporting requirements

If you’ve been staying up-to-date with our emails, you may remember seeing a few different features on the Corporate Transparency Act (CTA). If you need a refresher, you can watch my information session on the subject here. 

On March 1, 2024, a U.S. District Court in Alabama found that the filing requirements brought on by the CTA in National Small Business United d/b/a the National Small Business Association (NSBA) v. Janet Yellen, Secretary of the Treasury.

According to the Court, the CTA’s filing requirement exceeds the limits of Congress’s enumerated powers. In short, this is because the powers in which the CTA was authorized (foreign affairs, the Commerce Clause, and taxation) cannot be applied to the information collected by the Beneficial Ownership Information (BOI) Report. If you are interested in why that is, the Court’s full decision on the case – a 53-page memorandum – can be found here. 

In response, the Financial Crimes Enforcement Network (FinCEN) issued a press release on March 4, 2024. You can read the full release here. The release is succinct and to the point — FinCEN will comply with the decision, and will not enforce the CTA against “the plaintiffs in that action.”

The plaintiffs in question would be (1) an individual named Isaac Winkles, (2) any companies in which Isaac Winkles is a beneficial owner, and (3) members of the NSBA. If that’s not you, FinCEN’s portal for submitting BOI reports is still online and fully operational.  

I can hear you all now:

“Brint, who cares!? What does this mean for me? Do I still need to file?“

My answer? Yes. When in doubt, file.

While some attorneys have interpreted the Court’s finding as a complete halt of the filing requirement, our team continues to recommend that Reporting Companies and Beneficial Owners make preparations to comply with the CTA filing requirements. It’s possible — likely, even — that the government will appeal and request a stay during that process. Even that short press release from FinCEN I linked earlier heavily implies that they expect this court order will be temporary – that being said, we will be closely monitoring this and will keep you apprised of updates as they come in.

For now, if you have a business that was organized/incorporated before January 1, 2024, keep an eye out for more news on the CTA, as you have until December 31 to comply. However, for those who opened businesses after January 1, we highly recommend that you prepare to file before the end of March. In the meantime, please don’t hesitate to reach out to us if you have questions about the CTA, or if you want help complying. 

Prioritizing yourself should be part of your business plan from the very beginning.

Brint Hiatt is not just your business and estate planning attorney; he’s also been an entrepreneur since high school. As a long-time entrepreneur, he can help you better understand what your business needs to succeed, and what might cause your business to fail. According to Brint, one of the major setbacks for countless business owners is burnout: a state of emotional, physical, and mental exhaustion caused by excessive and prolonged stress. Here’s some of Brint’s best advice on how to support your business and your customers by supporting yourself:

Set Boundaries: As a small business owner, your work is never truly over for the day. It’s easy to get consumed by your business, but setting clear boundaries between your work and personal life is essential. Brint suggests attempting to designate specific work hours and really trying to stick to them. You can do this by avoiding checking emails or taking work calls during off-hours as much as possible. 
Delegate: As much as you can, try not to do everything yourself. If you have employees, train them to take over tasks that you don’t need to do. If employees are not practical for your business plan, you can always look into outsourcing some of the functions of your business. This will help to free up your time and reduce stress – which will likely result in happier clients/customers, and better-quality products/services. 
Take Breaks: Schedule regular breaks throughout your workday. Even short breaks can help you recharge and maintain your focus and productivity. This goes for prioritizing time spent with family and friends also – sometimes, unplugging for a while is the best way to reinvigorate your passion for your business. If you’re hesitant about taking that vacation, let this be your sign to book it now! 
Physical Health: Prioritize your physical well-being by getting regular exercise, eating nutritious meals, and getting enough sleep. Physical health has a direct impact on your mental and emotional well-being, and your mental and emotional well-being has a direct impact on your business.
 Practice Mindfulness: Brint practices meditation throughout the workday. He incorporates mindfulness techniques into his routine, such as meditation or deep breathing exercises. These practices help him manage stress and stay focused, so he can be the best lawyer he can be for his clients. 
 Learn to Say No: This one is something we admittedly struggle with at Hiatt Law, but Brint encourages small business owners to learn to decline further commitments when they are already overwhelmed. Learning to say “no” protects your time and energy, and ensures that your prior commitments are given the best care possible. 
Celebrate Your Wins: Acknowledge and celebrate both small and big achievements. Recognizing your successes boosts your motivation and self-esteem. This goes for your team, too. If you have employees, celebrate them! Similarly, a small business is very often a family business – don’t forget to tell your family you are grateful for their support.  We love seeing our Clients succeed, and part of that success is comfort, happiness, and – you guessed it – practicing self-care. By prioritizing yourself, we truly believe you’ll be better equipped to handle whatever life might throw at your small business.  — Are you still feeling overwhelmed by the pressures of running your business? Schedule a FREE strategy session with a team member to learn more about supporting your business, starting by supporting yourself. 

Schedule my FREE Strategy Session!