Beneficial ownership information (BOI) requirements under the Corporate Transparency Act (CTA) are back in effect as of February 18, 2025. FinCEN issued a notice advising that reporting companies are once again required to file BOI reports following a February 18th decision by the U.S. District Court for the Eastern District of Texas in Smith, et al. v. U.S. Department of the Treasury, et al. There, the court stayed its January 7, 2025, order which prohibited FinCEN from requiring BOI reporting or otherwise enforcing the CTA’s requirements and penalties.
The notice recognized that reporting companies may need additional time to comply with reporting obligations. As a result, FinCEN extended the deadline for the “vast majority of reporting companies” to March 21, 2025.
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.” While the scope and implications of this potential revision are unclear, FinCEN’s acknowledgment of the CTA’s burden on small businesses is noteworthy.
In other news, the House passed H.R. 736 by a vote of 408-0 on February 10, 2025, which would extend the reporting deadline to January 1, 2026, for reporting companies existing prior to January 1, 2024. The bill is currently in the Senate.
Thus, while the legal landscape surrounding the CTA is constantly evolving, reporting companies should begin taking the necessary steps to ensure timely compliance.
For questions, please contact author Cole Henderson or a member of the CTA Team.
For previous updates, visit:
https://wlj.com/the-saga-continues-where-does-the-corporate-transparency-act-stand/
https://wlj.com/corporate-transparency-act-update/
https://wlj.com/shining-a-light-on-corporate-transparency-what-the-new-corporate-act-means-for-you/