[co-author: Matteo de Suduiraut]
Entities subject to the Corporate Transparency Act’s beneficial ownership information reporting requirement are not currently required to file BOI reports. Beyond that, much remains in flux regarding whether and when reporting will be required.
Recent developments in the courts suggest that, while the government will continue to defend the validity of the CTA, FinCEN is prepared to extend the reporting deadline for all reporting companies by at least 30 days following a stay of the remaining nationwide injunction.
In addition, on February 10, 2025, the House of Representatives unanimously passed H.R. 736, the Protect Small Business from Excessive Paperwork Act of 2025. If enacted, the bill would require reporting companies formed or registered before January 1, 2024, to submit BOI reports to FinCEN by January 1, 2026, instead of by January 1, 2025, per current regulations.
For those of you keeping score at home, on January 23, 2025, the U.S. Supreme Court stayed the injunction, put in place by the U.S. District Court for the Eastern District of Texas in Texas Top Cop Shop, blocking enforcement of the CTA. However, in the separate matter of Smith v. U.S. Department of the Treasury (also in the Eastern District of Texas), Judge Kernodle enjoined enforcement of the CTA’s reporting rule on a nationwide basis. Given that the Supreme Court’s decision in Texas Top Cop Shop did not address the injunction in Smith, reporting companies are not currently required to file BOI reports with FinCEN and will not be subject to liability for failing to do so while Smith remains in effect.
On February 5, 2025, the government filed an appeal in the Eastern District of Texas challenging the injunction in Smith, citing the Supreme Court’s treatment of the injunction in Texas Top Cop Shop. If the injunction in Smith is stayed, FinCEN indicated that it intends to resume enforcement of the CTA with a 30-day filing extension from when the stay is granted.
As this situation remains fluid, companies with potential CTA filing obligations should continue to gather information that would be required in a beneficial ownership information report and be ready to file if and when enforcement of the CTA resumes.
