On Feb. 17, 2025, the U.S. District Court for the Eastern District of Texas (in Smith, et al. v. U.S. Department of the Treasury, et al.) granted the federal government’s motion to stay a nationwide preliminary injunction that had previously suspended reporting obligations under the Corporate Transparency Act (CTA). The court’s order comes in response to a notice of appeal filed by the U.S. Department of Justice on Feb. 5, 2025, pursuant to which the federal government sought to appeal the injunction that had been previously issued by the court on Jan. 7, 2025 and to simultaneously request a stay of the injunction pending the court’s final decision as to the appeal.
The court’s granting of the stay means that, until a further decision is issued by the court as to the appeal and/or the merits of the case, the CTA is reinstated. Accordingly, as of date of this alert:
- all reporting companies are again required to comply with the CTA (subject to certain filing deadline extensions as noted below); and
- the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) will resume enforcing the CTA and its beneficial ownership information (BOI) reporting requirements.
In response to the order, FinCEN issued a notice on Feb. 18, 2025 providing for the following updated deadlines:
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 were previously given a reporting deadline later than the March 21, 2025 deadline must file their initial BOI report by that later deadline. For example, if a company’s reporting deadline is in April 2025 because it qualifies for certain disaster relief extensions, it should follow the April deadline, not the March deadline.
It also is important to note that FinCEN indicated in its notice that it will assess and possibly make further modifications of the deadlines and that it is considering revising the CTA to lessen the reporting burden for lower-risk entities, including many small businesses:
“Notably, in keeping with [the Department of the] 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. FinCEN also intends to initiate a process this year to revise the BOI reporting rule to reduce burden for lower-risk entities, including many U.S. small businesses.”
With the new March 21, 2025 deadline fast approaching, reporting companies are encouraged to conduct an analysis to determine who in their ownership/management structure is considered a beneficial owner under the CTA, collect the necessary information from such beneficial owners and file the requisite BOI report prior to the applicable deadline. Since the CTA imposes an ongoing requirement to disclose this information, reporting companies also need to implement measures to ensure continuous compliance with the reporting requirements.
Attorneys at Bond continue to monitor the ongoing developments of the CTA and remain available to answer questions, assist with the analysis of your reporting company’s organizational structure, and, if necessary, prepare and file BOI reports.
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