Corporate Transparency Act Reporting Is Mandatory Again (At Least For Now)
In a dizzying development, businesses are once again required to comply with Corporate Transparency Act (CTA) reporting requirements – at least for now.
On January 23, 2025, the Supreme Court granted the government’s motion to stay a nationwide injunction issued by a federal judge in Texas (Texas Top Cop Shop, Inc. v. McHenry—formerly, Texas Top Cop Shop v. Garland), however another nationwide injunction in a parallel case remained in place. On February 18, 2025, the U.S. District Court for the Eastern District of Texas issued an Order in Smith, et al. v. U.S. Department of the Treasury, et al., 6:24-cv-00336 (E.D. Tex.) lifted its parallel nationwide preliminary injunction against CTA enforcement. Therefore, Beneficial Ownership Information (BOI) reporting under the Corporate Transparency Act (CTA) is once again mandatory.
However, FinCEN has extended the filing deadline for BOI reports for “most companies” by 30 calendar days. FinCEN states, “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. FinCEN will provide an update before then of any further modification of this deadline, recognizing that reporting companies may need additional time to comply with their BOI reporting obligations once this update is provided.”
FinCEN also indicated that it will assess whether additional changes are necessary to keep with “Treasury’s commitment to reducing the regulatory burden on businesses” while at the same time “prioritizing reporting for those entities that pose the most significant national security risks.”
FinCEN also stated that it plans to begin a process to revise the BOI reporting rule to reduce burdens for lower-risk entities, including many U.S. small businesses.
Please see the notice from FinCEN for further details. Although BOI reporting is mandatory again, the CTA remains in flux. Along with FinCEN’s possible modification of BOI reporting rules, there are still several pending lawsuits challenging the constitutionality of the CTA. Additionally, there is legislation pending in Congress to extend the BOI reporting deadline to January 1, 2026, for companies in existence before 2024. H.R. 736 passed the House, and its companion bill S.505 is pending in the Senate.
Questions on beneficial ownership information reports and the CTA? Reach out to Robert Garner or a member of our Corporate group.