Understanding the Latest Developments in CTA Beneficial Ownership Reporting
On February 19, 2025, in Smith v. U.S. Department of the Treasury, et al., 6:24-cv-00336 (E.D. Texas), the U.S. District Court for the Eastern District of Texas issued a stay on its January 7, 2025, order, which had enjoined enforcement of the beneficial ownership information (BOI) reporting requirements under the Corporate Transparency Act (CTA) nationwide. As a result, the CTA’s reporting requirements are again in effect.
FinCEN’s Response and Extended Filing Deadline
In response to the stay, the Financial Crimes Enforcement Network (FinCEN) announced today that most reporting companies originally required to file beneficial ownership reports by December 31, 2024, will now have until March 21, 2025 to submit their filings. However, entities that had previously received disaster-related extensions may continue to use their previously extended deadline if it falls later than March 21, 2025.
Future Modifications and Small Business Relief
FinCEN also noted that it will use this 30-day extension to evaluate potential modifications to reporting deadlines, prioritizing reporting for entities that pose significant national security risks. However, it remains unclear whether FinCEN will introduce any immediate changes that would exempt currently obligated entities from filing before the March 21 deadline.
Additionally, FinCEN plans to revise the beneficial ownership reporting process this year to reduce the compliance burden for lower-risk entities, including many U.S. small businesses. Whether this relief will arrive before the March 21, 2025, deadline remains uncertain.
Legislative Efforts to Extend the CTA Deadline
On the legislative front, the House of Representatives unanimously passed a bill on February 10, 2025, proposing to extend the CTA’s reporting deadline for existing entities to January 1, 2026. A companion bill has also been introduced in the Senate. If enacted, this legislation would provide additional time for small businesses and other reporting entities to comply with the CTA’s reporting requirements.
Key Takeaways for Businesses
- CTA’s Reporting Requirements Are Back in Effect – The January 7, 2025, injunction has been stayed, reinstating the requirement for covered entities to report beneficial ownership information.
- Extended Deadline to March 21, 2025 – Most reporting companies that were originally required to file by December 31, 2024, now have until March 21, 2025.
- Potential Modifications to Reporting Requirements – FinCEN is assessing changes but has not yet provided clarity on whether new exemptions will be introduced before the new deadline.
- Legislative Efforts May Provide Further Extensions – A House-passed bill seeks to push the deadline to January 1, 2026, with a Senate companion bill pending.
Businesses subject to the CTA should stay informed about further developments from FinCEN and Congress to ensure compliance with applicable reporting requirements. For now, companies should prepare to meet the March 21, 2025 deadline unless further modifications or legislative changes provide additional relief.
