The Corporate Transparency Act1
On February 17, 2025, the U.S. District Court for the Eastern District of Texas granted the government issued an order staying the preliminary relief it previously granted in Smith v. United States Department of the Treasury, et al.
What does this mean? It means the Corporate Transparency Act (CTA) reporting obligations have been reinstated, pending appeal, and subject to the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) 30-day deadline extension. Accordingly, the injunction that prohibited enforcement of FinCEN’s beneficial ownership information (BOI) reporting rules is lifted, and the BOI reporting requirements are required, again.
FinCEN posted a new alert to announce its reporting requirements were back, which included applicable deadlines and possible modifications to the CTA’s reporting requirements and deadlines.
New Applicable Deadlines and Possible Modifications:
- For the vast majority of reporting companies, the new deadline to file an initial, updated and/or corrected BOI report is now March 21, 2025. If there are any modifications before then, FinCEN will provide an update, recognizing that reporting companies may need additional time to comply with their BOI reporting obligations.
- Reporting companies that were previously given a reporting deadline later than the March 21, 2025 deadline must file their initial BOI reports by that later deadline, not the March deadline. Certain company may have qualified for this later deadline due to certain disaster relief extensions.
- FinCEN made the following announcement: Notably, in keeping with Treasury’s commitment to reducing regulatory burden on businesses, during this 30-day period FinCEN will assess its options to further modify deadlines, while prioritizing reporting for those entities that pose the most significant national security risks. FinCEN also intends to initiate a process this year to revise the BOI reporting rule to reduce burden for lower-risk entities, including many U.S. small businesses.
Assessment and Feedback:
- Determine and confirm whether your entity falls within the scope of the CTA’s reporting obligations – corporations, limited liability companies, and similar entities created or registered to do business in the United States.
- The 30 day extension to file initial, updated and/or corrected BOI reports until March 31, 2025 provides clarity and confirmation for businesses and its BOI reporting obligations, unless a later deadline applies.
- FinCen is open to reporting companies needing additional time to comply with their BOI reporting.
- Start gathering needed information – collect all necessary BOI, including identifying details of individuals who own or control the entity.
- Monitor Congressional developments – keep up with legislative changes that may impact reporting requirements, including the potential enactment of the proposed bipartisan bill extending the deadline.
1Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem. This alert does not constitute legal advice. Each reader’s situation may be based on a specific factual analysis. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the author of this alert, Richard Y. Cheng, any other attorney at Ritter Spencer Cheng, PLLC, or other competent legal counsel.
