Latest developments regarding the Corporate Transparency Act

On Monday, Feb. 17, 2025, the judicial impediment to the enforcement of the Corporate Transparency Act was lifted. The next day, the Financial Crimes Enforcement Network (FinCEN) announced that the new due date for most suspended Beneficial Ownership Information (BOI) filings is March 21, 2025. Barring further developments, reporting companies that have not yet filed their BOI reports should take action to avoid late filing penalties.

In its announcement of the new reporting deadline, FinCEN did state that it will review its options to further modify filing deadlines with a focus on reporting for entities that pose the most significant national security risks. FinCEN also intends to revise BOI reporting rules to lower the compliance burden for lower-risk entities, including many small businesses.

Separate from these developments, the House unanimously passed HR736, the Protect Small Business from Excessive Paperwork Act. This act extends the filing deadline for entities formed before Jan. 1, 2024, to Jan. 1, 2026. It is not clear how quickly the Senate will take up the deadline extension bill and whether it will be enacted. [Legislation to completely repeal the CTA has been introduced, but it has not yet attracted bipartisan support; its fate is not certain.]

Finally, it is important to remember that most of the CTA litigation has been about whether to enjoin enforcement of the CTA while courts consider the merits of the underlying challenge to the CTA. One of the earliest decisions to hold that the CTA is unconstitutional has been appealed to the Eleventh Circuit, where oral arguments were held on Sept. 27, 2024. That decision, when it is issued, will provide further guidance on the status of the CTA.

Key takeaway

The two nationwide preliminary injunctions that have prevented enforcement of the CTA while parties challenge its constitutionality have now been stayed. FinCEN announced that the due date for most filings is now March 21, 2025. Subject to further judicial or legislative action, reporting companies that have not filed should take steps to comply with this new deadline.

If you have any questions regarding the CTA, please contact Jack Beeler, Jim Mattimoe, Sue Cliffel or Diana Jia.