After weeks of legal ping-pong, the Corporate Transparency Act (CTA) reporting obligations are back in effect.
On Feb. 18, 2025, the U.S. District Court for the Eastern District of Texas lifted its nationwide injunction in Smith v. United States Department of Treasury that blocked enforcement of the CTA’s reporting requirements. As a result, the CTA’s beneficial ownership information (BOI)reporting requirements are back in effect and reporting companies must file BOI reports with FinCEN.
Following the court’s order, FinCEN issued the following guidance:
- For most preexisting reporting companies, the new deadline to file an initial, updated and/or corrected BOI report is March 21, 2025.
- Reporting companies previously given an extended deadline later than March 21 must file by the later deadline. This applies, for example, to reporting companies whose deadlines were previously pushed back due to certain natural disasters.
- Reporting companies created or registered on or after Feb. 19, 2025, must file an initial BOI report within 30 days from the date of their creation or registration.
FinCEN advised that it may further modify these deadlines and provide additional updates before March 21. FinCEN also advised that it intends to consider revisions to the BOI reporting rule to reduce the burden on lower-risk entities. These rule changes could include exemptions to relieve certain lower-risk entities of their reporting obligations under the CTA.
Congress is also considering changes to the CTA’s reporting requirements. On Feb. 10, the House of Representatives passed a bill that would extend the reporting deadline for companies formed or registered before Jan. 1, 2024, to Jan. 1, 2026. The bill’s extended deadline would not apply to reporting companies formed on or after Jan. 1, 2024. The bill passed the House with full bipartisan support by a vote of 408 to zero. A companion bill was introduced in the U.S. Senate on Feb. 11. It remains to be determined whether the Senate will pass its bill.
Warner’s CTA task force continues to recommend that reporting companies assemble the necessary information and prepare to file their BOI reports by the March 21, 2025, deadline. Until FinCEN releases additional guidance, or Congress passes and the president signs legislation to extend the reporting deadline, companies should expect to report by March 21. Companies may wait to file their reports until closer to the deadline, but we advise assembling all the information required to submit reports as soon as possible.
Reporting companies are subject to liability for failing to file their BOI reports by the applicable deadline. For an explanation of the CTA and the information that must be reported, please see our prior eAlert.
With potential legislative and regulatory changes on the horizon, this latest change is unlikely to be the final word on the CTA.
