On February 18, 2025, the U.S. District Court for the Eastern District of Texas stayed the final nationwide injunction preventing enforcement of the Corporate Transparency Act (“CTA”). The recent decision in Smith, et al v U.S. Dept. of Treasury, has allowed the Financial Crimes Enforcement Network (“FinCEN”) to reinstate the CTA’s beneficial ownership information (“BOI”) reporting requirements. As a result, existing companies that are required to submit their BOI reports must now do so by March 21, 2025. Please see our client alert from November 5, 2024 for basic information about the CTA filing requirements and an overview of the filing process.
Case Law Developments
This decision follows a string of litigation efforts initiated last year to halt enforcement of the CTA. Texas Top Cop Shop, Inc. et al. v Garland et al. saw the issuance of the first nationwide preliminary injunction against enforcement of the CTA, as described in our December 9, 2024 client alert. After the Fifth Circuit lifted this injunction on December 23rd and reinstated it three days later, the case moved up to the U.S. Supreme Court. The Supreme Court issued a final ruling lifting the nationwide injunction on January 23, 2025.
However, in the midst of the Texas Top Cop Shop litigation, another case challenging the constitutionality of the CTA served as an additional roadblock preventing enforcement of the Act. The same U.S. District Court for the Eastern District of Texas issued an injunction against the CTA in Smith v U.S. Dept. of Treasury on January 7, 2025. But the last pillar suspending the application of the Act has fallen with the recent stay and FinCEN has quickly confirmed its reinstatement of the BOI reporting requirements.
FinCEN’s New Deadlines
FinCEN released a statement on February 19, 2025, to clarify the new filing deadlines. Most reporting companies are now required to file an initial, updated, and/or corrected BOI report by March 21, 2025. New companies moving forward (those formed or registered on or after February 18, 2025), must file within 30 days from the date of creation or registration. Also, reporting companies previously provided with extended deadlines due to disaster relief should follow those later deadlines (see the 10/29/2024 notices on FinCEN’s website for more information on this reporting relief).
Looking Ahead
Although there are pending appeals and bills related to the constitutionality of the CTA that could again change these filing deadlines, the BOI reporting deadline is now March 21, 2025.
Companies that are required to file beneficial ownership reports under the CTA, but have not yet filed, should resume their preparations and ensure they meet these new deadlines.
This alert does not constitute legal advice but does provide a brief update on recent litigation regarding the CTA and its reporting requirements. If you have remaining questions or would like our help in navigating these developments, please reach out to your regular GTC contact.