On December 24, 2024, we published a client alert regarding the recent preliminary injunction halting enforcement of the Corporate Transparency Act ("CTA") and related filing deadlines.
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. Bessent – formerly, Texas Top Cop Shop, Inc. v. McHenry and Texas Top Cop Shop v. Garland).
Then, on February 18, 2025, the U.S. District Court for the Eastern District of Texas in Smith, et al. v. U.S. Department of the Treasury, et al., 6:24-cv-00336 (E.D. Tex.), granted the Department of Justice's request to stay the nationwide injunction that had previously paused CTA reporting requirements.
While those cases were pending, the Financial Crimes Enforcement Network ("FinCEN") paused the beneficial ownership information (BOI) reporting requirements under the CTA. With the latest decision, however, the BOI reporting requirements under the CTA are once again back in effect.
After the Smith decision, FinCEN posted the following on its website:
[T]he Department of Treasury recognizes that reporting companies may need additional time to comply with their BOI reporting obligations, FinCEN is generally extending the deadline 30 calendar days from February 19, 2025, for most companies. [March 21, 2025, ed.]
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.
Updated Deadlines
- 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.
- Reporting companies that were previously given a reporting deadline later than the March 21, 2025 deadline must file their initial BOI report 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 should follow the April deadline, not the March deadline. [FinCEN extended the reporting deadlines for companies affected by Hurricanes Beryl, Debbie, Francine, Helene, and Milton, ed.]
To further add to the confusion, on February 10, 2025, the House passed the Protect Small Businesses from Excessive Paperwork Act (H.R. 736) unanimously, with a 408-0 vote. The Senate is considering a companion bill (S.505). The House bill, if made law, would modify Section 5336(b)(1)(B) of title 31, United States Code, and extend the date to file BOI reports with FinCEN to January 1, 2026 (previously January 1, 2025), but only for reporting companies formed or registered before January 1, 2024. Those formed on or after January 1, 2024, would not find relief.
Another bill, the somewhat flamboyantly named Repealing Big Brother Overreach Act (H.R. 8147), proposes to repeal the CTA altogether. That bill was originally proposed in the 2023-2024 session and reintroduced on January 15, 2025.
Importantly, none of the above bills are yet law and the CTA remains in effect. As such, reporting companies should follow FinCEN's guidance and plan to file BOIs on or before the revised deadlines, as applicable.
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.
