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In a blow to government efforts to combat money laundering, a federal court has ruled that the Treasury Department cannot require some small businesses to report personal details about their owners.

Under a section of a 2020 law that took effect Jan. 1, small businesses must share details about their so-called beneficial owners, individuals who hold financial stakes in a company or have significant power over their business decisions. The law, the Corporate Transparency Act, passed with bipartisan support in Congress and was intended to help the Treasury Department’s financial-crimes division identify money launderers who hide behind shell corporations.

But in a ruling issued late Friday, Judge Liles C. Burke of the U.S. District Court in Huntsville, Ala., sided with critics of the law. They argue that asking a company’s owners to present personal data — names, addresses and copies of their identification documents — was a case of congressional overreach, however well intended.

“Congress sometimes enacts smart laws that violate the Constitution,” Judge Burke wrote in a 53-page filing. “This case, which concerns the constitutionality of the Corporate Transparency Act, illustrates that principle.”

Judge Burke’s ruling prevented the department from enforcing the ownership reporting requirements on the plaintiff in the Alabama case, the National Small Business Association, a nonprofit trade group that represents more than 65,000 member companies.

Lawyers who have followed the Alabama case said over the weekend that they expected the government to quickly request that the injunction be paused, either by Judge Burke or the 11th Circuit Court of Appeals in Atlanta, or both. The Justice Department will almost certainly appeal the Alabama case to the circuit court, the lawyers said.