More Transparency Ahead?

The Corporate Transparency Act is Back On

Is it for good this time?

Beneficial Ownership Information (BOI) reporting requirements and deadlines are back into effect. The Department of Treasury has delayed the deadline for reporting to March 21, 2025 (30 days from February 19, 2025). The government reiterated its “commitment to reducing regulatory burden on businesses” and has indicated that it will continue to evaluate options in furtherance of this goal during this 30-day delay and beyond. Options that are under consideration include: allowing for further modification of deadlines as well as revising BOI reporting requirements moving forward. The government's stated focus will be to prioritize reporting obligations for those entities that pose the "most significant national security risks" and minimize the burdens on “lower-risk entities, including many U.S. small businesses.”

While the pause on BOI filing deadlines has been lifted, the litigation challenging the Corporate Transparency Act remains ongoing. Over the next days and months, we can expect additional guidance from the US government and further developments in connection with ongoing litigation.

February 19th update from FinCEN (fincen.gov/boi):

“With the February 18, 2025, decision by the U.S. District Court for the Eastern District of Texas in Smith, et al. v. U.S. Department of the Treasury, et al., 6:24-cv-00336 (E.D. Tex.), beneficial ownership information (BOI) reporting requirements under the Corporate Transparency Act (CTA) are once again back in effect. However, because the Department of the Treasury recognizes that reporting companies may need additional time to comply with their BOI reporting obligations, FinCEN is generally extending the deadline 30 calendar days from February 19, 2025, for most companies.

Notably, in keeping with 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.

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.

• As indicated in the alert titled “Notice Regarding National Small Business United v. Yellen, No. 5:22-cv-01448 (N.D. Ala.)”, Plaintiffs in National Small Business United v. Yellen, No. 5:22-cv01448 (N.D. Ala.)—namely, Isaac Winkles, reporting companies for which Isaac Winkles is the beneficial owner or applicant, the National Small Business Association, and members of the National Small Business Association (as of March 1, 2024)—are not currently required to report their beneficial ownership information to FinCEN at this time.

• For updates on other litigation related to the Corporate Transparency Act and its effect on reporting requirements for certain plaintiffs, see alerts below.”