Corporate Transparency Act: It’s Back On
For those watching the drama unfold over the Corporate Transparency Act, it’s been rather chaotic, with a series of on-again-off-again court orders over recent months. But skipping over a few steps, the current status is that the CTA’s filing requirements are now back on for most businesses.
In an announcement on February 19, 2025, FinCEN (that is, the Financial Crimes Enforcement Network, a branch of the US Department of Treasury) has extended the filing deadlines such that most companies now need to file their initial Beneficial Ownership Information (BOI) report by March 21, 2025. Companies formed on or after February 19 will have 30 days from the date of formation.
Note that, as was previously the case, any company that was a member of the National Small Business Association as of March 1, 2024, does not need to file a BOI report, since there is a separate court order preventing enforcement of the CTA as to that limited class of businesses.
FinCEN has also indicated that within the next 30 days it intends to consider extending the filing deadlines or otherwise reducing the compliance burden. Considering also that litigation about the CTA is ongoing in several courts around the country, it’s quite likely that this is not the last word.
Those companies that wish to hold off on filing their BOI report in hopes that the CTA will ultimately be found unconstitutional may still want to begin gathering the information needed for the filing, just in case there is no further reprieve, as it may take a while to obtain the information from all of a company’s beneficial owners.
Meanwhile, reach out to us if you have any questions about your filing obligations.
Updated December 12, 2024
We have previously written about the new Corporate Transparency Act (CTA), a federal law that requires some 20 million businesses to report their beneficial owners (including senior officers) to the Financial Crimes Enforcement Network (FinCEN), a division of the US Department of Treasury. For many companies, the deadline to file is coming up on January 1, 2025.
But on Tuesday, December 3, 2024, a District Court in Texas issued a preliminary injunction finding the CTA unconstitutional and preventing enforcement of the CTA nationwide. (Read the full text of the 79-page order.) FinCEN has filed a notice of appeal to the Fifth Circuit Court of Appeals; and from there it could end up before the US Supreme Court.
FinCEN has issued a statement confirming that the CTA’s filing deadlines have been suspended pending appeal, though reports can still be filed voluntarily. It remains to be seen what will happen to the filing deadlines if the Texas preliminary injunction is voided on appeal. We at PathLight Law will continue to monitor developments.
Meanwhile, reach out to us if you have any questions about your filing obligations.