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Key Takeaways
- The last nationwide injunction enjoining enforcement of the Corporate Transparency Act (CTA) has been lifted.
- The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) has extended the deadline for most companies to file beneficial ownership information (BOI) to March 21, 2025.
What Happened?
- On Jan. 7, 2025, a federal district court in Texas issued a nationwide order that temporarily put enforcement of the CTA on hold. The government appealed the order and, in parallel, requested a stay of the order during the appeal.
- Earlier this week, the Texas district court agreed to stay its previous order until the appeal is completed, meaning CTA reporting requirements are once again in effect.
What's Next?
- FinCEN has acknowledged that reporting companies may need additional time to comply with their CTA reporting obligations and announced that March 21, 2025, is the deadline for most reporting companies to file an initial, updated and/or corrected BOI report. FinCEN stated that during the 30-day extension period, it will assess its options for further modifying deadlines.
- FinCEN also announced that it intends to initiate a process this year to revise the BOI reporting rule to reduce the burden for lower-risk entities.
- Congress is considering legislation to further extend the initial CTA reporting deadline for certain entities. On February 10, 2025, the U.S. House of Representatives passed legislation to extend the initial CTA reporting deadline for entities created or registered before 2024 to Jan. 1, 2026. The legislation is currently with the Senate Banking Committee.
- We recommend that reporting companies and others affected by the CTA resume compliance with the CTA and timely file all necessary reports and updates. Given the possibility of rapid changes, reporting companies and others affected by the CTA should closely monitor developments and consult with their legal advisers.
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Managing Partner, Los Angeles Office; Co-Chair, Private Client