CTA Update: Beneficial Ownership Information Injunction Lifted; FinCEN Promises 30-Day Filing Delay
On Tuesday, February 18, 2025, the U.S. District Court for the Eastern District of Texas lifted the nationwide injunction in the Smith, et al. v. U.S. Department of The Treasury, et al. case and the beneficial ownership information reporting requirements under the Corporate Transparency Act (CTA) are once again in effect for most reporting companies.
Because the Department of the Treasury recognizes that reporting companies may need additional time to comply with their Beneficial Ownership Information (BOI) reporting obligations, FinCEN is generally extending the deadline 30 calendar days from February 19, 2025, for most companies as follows:
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 qualify for disaster relief may have extended deadlines that fall beyond March 21, 2025. These companies should abide by whichever deadline is later.
Further, FinCEN has stated that over the next 30-day period, it will assess its options to further modify deadlines or reporting requirements for lower-risk entities, including many U.S. small businesses, while prioritizing reporting for those entities that pose the most significant national security risks.
In addition, we do want you to be aware of recent legislative developments as efforts continue to seek a delay of the reporting deadline and on February 10, 2025, the House unanimously passed the Protect Small Businesses From Excessive Paperwork Act of 2025 (H.R. 736), which would delay the beneficial ownership information mandatory reporting requirement due date to January 1, 2026, for entities formed prior to January 1, 2024. The bill has now been sent to the Senate.
Next Steps
We strongly encourage any entity deemed a reporting company under the CTA to timely file their BOI reporting by the extended filing deadlines stated above.
If you have any questions regarding the legal implications of these recent court or legislative proceedings or need a legal determination as to whether an exemption applies to your entity or whether legal relationships constitute beneficial ownership, we strongly encourage you to consult legal counsel with expertise in this area to assist your organization. Please note that penalties for willfully violating the CTA’s reporting requirements include civil penalties of up to $606 per day that a violation is not remedied, a criminal fine of up to $10,000, and/or imprisonment of up to two years.
For additional information regarding the beneficial ownership reporting requirements under the CTA, refer to FinCEN’s Frequently Asked Questions document at https://www.fincen.gov/boi-faqs or to the FinCEN Reference Materials at https://www.fincen.gov/boi/Reference-materials for detailed information and updated guidance regarding any further deadline changes that may be promulgated.
As always, please feel free to contact us if you have any questions.