Most Companies Will Need to File by March 21, 2025
As discussed here last month, in early January, the U.S. District Court for the Eastern District of Texas issued a nationwide injunction temporarily blocking enforcement of the Corporate Transparency Act (CTA) (see Smith et al. v. DOT et al., No. 6:24-cv-336). However, in light of the U.S. Supreme Court’s decision to overturn a similar injunction in a separate case involving the CTA (McHenry v. Texas Top Cop Shop, Inc.), on February 18, 2025, the Smith court granted the government’s request to stay the nationwide injunction, while a Fifth Circuit appeal moves forward.
As a result, the CTA is back on. At least for now!
The decision in Smith, and the Supreme Court’s order in Texas Top Cop Shop, did not address the underlying merits – i.e., whether the beneficial ownership interest (BOI) reporting requirements under the CTA are constitutional – and the appeals in those cases are still pending in the Fifth Circuit.
Meanwhile, the Financial Crimes Enforcement Network (FinCEN) released a statement confirming that “beneficial ownership information (BOI) reporting requirements under the [CTA] are once again back in effect” and noting that the filing deadline for most reporting companies has been extended to March 21, 2025.
FinCEN also wrote that “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.” Accordingly, it is not clear yet whether FinCEN will extend the deadline further.
There also is pending legislation that could affect the new filing deadline. Last week, the House passed by unanimous vote (408-0) the “Protect Small Businesses from Excessive Paperwork Act of 2025” (H.R. 736), which would give companies that were organized prior to January 1, 2024, until January 1, 2026, to submit their initial BOI report. A companion bill has been introduced in the Senate (S. 505), and has been referred to committee, but no further action has been taken as of today. That legislation is separate from the “Repealing Big Brother Overreach Act” that was re-introduced in Congress last month and which would repeal the CTA; however, that bill has not moved forward in either chamber.
So, unless there are intervening legislative, regulatory, or litigation developments (which – given the CTA’s turbulence over the past few months – is definitely possible), companies that have not done so already should prepare to file their initial BOI report by March 21, 2025. For further information on the CTA and the history of the long and winding road that has taken us here, see our previous client alerts, which can be found here, here, here, and here.
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