On February 19, 2025, the Financial Crimes Enforcement Network (FinCEN) announced the reinstatement of mandatory reporting requirements under the Corporate Transparency Act (CTA), along with the extension of the filing deadline to March 21, 2025, for most companies.
Background:
Over the past few months, several legal challenges have been filed in U.S. courts against the constitutionality of the CTA. As a result, preliminary injunctions were granted suspending the enforcement of the regulation pending an appeal or a decision regarding the constitutionality of the regulation- thereby making all reporting requirements voluntary. Since then, the reporting requirements followed a dizzying journey: first suspended on December 3, 2024; then reinstated on December 23, 2024; suspended again on December 26, 2024; and now reinstated once again on February 18, 2025. More details on these developments can be found in our previous client updates.
Most recently, on February 18 2025, the district court in Smith v. U.S. Department of the Treasury issued a stay on its injunction against enforcing the CTA, referencing the U.S. Supreme Court’s stay on a similar injunction in another challenge against the CTA, Texas Top Cop Shop v. McHenry. As such, FinCEN confirmed that the CTA’s beneficial ownership reporting requirements are once again enforceable:
- For the vast majority of reporting companies, the new deadline to file an initial, updated, or corrected BOI report is now March 21, 2025.
- Reporting companies that were previously given a reporting deadline later than March 21, 2025, may still file their initial BOI report by that later deadline (for example, companies which benefit from certain disaster relief extensions).
- Over the next 30 days, FinCEN will assess options to further modify the deadlines, and provide an update before then of any further changes, while prioritizing reporting from entities that post more significant US national security risks. Additionally, FinCEN plans to revise the BOI reporting rule this year to reduce the burden on lower-risk entities, including small businesses.
Although the final outcome of the litigation against the CTA is still pending and the regulation may change under the regulator’s proposed revisions, it is prudent for reporting entities to ensure they can meet the updated submission deadlines, while monitoring developments regarding the ongoing cases.
This memorandum contains general information only and does not constitute legal advice or a substitute for legal counsel. This memorandum is provided as a service to our clients, with the clarification that in any specific case, a separate discussion must be held regarding the matter at hand.
For any questions or clarifications, please contact our team responsible for this matter at the email address: CTA@shibolet.com.
