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The US Corporate Transparency Act is on once again -- Continue to check this space!
The US Corporate Transparency Act (CTA) is once again back in effect, at least for the time being, and reporting companies covered by the CTA are required to file beneficial ownership information (BOI) reports with the US Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN), subject to updated reporting deadlines.
On 17 February 2025, a US district court in Texas, in Smith v. U.S. Department of the Treasury, stayed its previous nationwide preliminary injunction that blocked enforcement of the CTA, pending appeal. This means that FinCEN is once again enforcing the CTA while the litigation challenging its constitutionality proceeds through the courts. The Texas district court’s ruling relied on the US Supreme Court’s action on 23 January 2025 when it stayed a similar nationwide injunction issued in a separate case, Texas Top Cop Shop, Inc. v. McHenry (formerly, Texas Top Cop Shop v. Garland).
The appeal in the Smith case will now proceed before the Fifth Circuit unless the court pauses the Smith appeal to first rule on the appeal in Texas Top Cop Shop, which also questions the constitutionality of the CTA. Oral arguments in Texas Top Cop Shop are scheduled for 1 April 2025.
Due to the Smith ruling, on 19 February 2025, FinCEN updated its website to reflect the following modifications to the filing deadlines for BOI reports:
- For the vast majority of reporting companies, the new deadline to file an initial, updated, and/or corrected BOI report is now 21 March 2025. FinCEN will provide an update before such date if there is any further modification of this deadline, indicating that it recognizes that reporting companies may need additional time to comply with their BOI reporting obligations once this update is provided.
- Reporting companies that were previously given a reporting deadline later than 21 March 2025 must file their initial BOI reports by that later deadline. For example, if a company’s reporting deadline is in April 2025 because it qualifies for certain disaster relief extensions, it is subject to the April deadline and not the March deadline.
Under the CTA’s BOI reporting rule, a reporting company formed in 2024 has 90 days from formation to make its initial filing (so companies formed in late December 2024 may have a few additional days to file their initial BOI reports beyond 21 March 2025). However, the 90-day deadline does not apply to companies formed on 1 January 2025 or later.
Going forward, newly formed reporting companies must file their initial BOI reports by the later of 30 days after formation or 21 March 2025. Reporting companies must also update their BOI reports by the later of 30 days after any changes to previously reported information or 21 March 2025.
FinCEN also announced that it will assess further modifications of these deadlines, prioritising reporting for those companies that pose the most significant risks to US national security. FinCEN further plans to start revising the BOI reporting rule later this year in order to ease compliance burdens for lower-risk entities, including many US small businesses.
Separately, on 10 February 2025, the US House of Representatives passed the “Protect Small Businesses from Excessive Paperwork Act of 2025.” That bill, which is now under review by a committee in the US Senate, proposes a one-year delay for companies formed before 1 January 2024 to comply with the CTA’s BOI reporting requirements. However, if passed, the bill will not change the filing deadlines for companies formed after that date or for submitting updates to previously filed BOI reports.
Please see our previous blogs below for an overview of the CTA’s BOI reporting requirements and a history of the back-and-forth to date with regard to the CTA’s enforcement and associated modification of the reporting deadlines.
We will continue to monitor events and provide updates.
