A federal court in Texas stayed its nation-wide injunction of the Corporate Transparency Act (CTA). As a result, the Financial Crimes Enforcement Network (FinCEN) can enforce the CTA. FinCEN has confirmed that the CTA is enforceable at this time with a new deadline of March 21, 2025, for most companies. Companies seeking to comply with the CTA should file their beneficial ownership report with FinCEN through its Beneficial Owner Information (BOI) interface at https://boiefiling.fincen.gov/. The relevant deadlines are as follow:
- Companies formed prior to Jan. 1, 2024, will have until Jan. 1, 2026, to comply. This is a one-year extension that is anticipated to be granted by Congress. The U.S. House of Representatives unanimously passed HR 736 and it now goes to the Senate. Companies should still prepare to file by March 21, 2025, in the meantime.
- Companies formed in 2024 will have until March 21, 2025, to comply. 1
- Companies formed in 2025 will need to comply on the later of March 21, 2025, or 30 days after the company was formed.
HR 776 would not extend the reporting deadline from March 21, 2025 for companies formed after Dec. 31, 2023.
For clarity, we provide an updated timeline of the various developments regarding the CTA:
- On Dec. 3, 2024: In Texas Top Cop Shop, Inc. v. Bondi (Top Cop Shop), the U.S. District Court for the Eastern District of Texas issued a nation-wide preliminary injunction, temporarily pausing enforcement of the CTA's reporting requirements.
- On Dec. 23, 2024: A motions panel of the U.S. Court of Appeals for the Fifth Circuit stayed the Top Cop Shop preliminary injunction, reinstating the CTA's reporting obligations.
- On Dec. 26, 2024: A different panel—a merits panel—of the Fifth Circuit vacated the Top Cop Shop stay, reinstating the preliminary injunction pending a decision on the merits of that injunction.
- On Jan. 7, 2025: In Smith v. United States Department of the Treasury (Smith), the U.S. District Court for the Eastern District of Texas issued a similar nation-wide preliminary injunction, temporarily pausing enforcement of the CTA's reporting requirements.
- On Jan. 23, 2025: The U.S. Supreme Court stayed the Top Cop Shop preliminary injunction, reinstating the CTA's reporting requirements. Critically, the Supreme Court order was not a decision about the constitutionality of the CTA; rather, the decision related only to the nation-wide injunction itself. Further, the decision did not explicitly address the nation-wide injunction issued in Smith, so the Smith injunction remained in effect.
- On Feb. 17, 2025: The District Court stayed the Smith nation-wide injunction in light of the Top Cop Shop stay, reinstating the CTA's reporting requirements.
Legal proceedings remain ongoing. The Fifth Circuit's court ruling on the merits of the preliminary injunction in the Top Cop Shop case is anticipated in the coming months after oral argument is held on April 1, 2025. Although the injunction could be reinstated in the future, FinCEN can currently enforce the CTA. Companies should gather the necessary information to file BOI reports.
Footnote
1 Companies eligible for the disaster relief deadline extension should file by the later date provided by that relief.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
