The Corporate Transparency Act enforcement has resumed following the stay of the last remaining nationwide injunction. Here are the key updates and deadlines:
New Primary Deadline: March 21, 2025
- This applies to most reporting companies requiring initial BOI (Beneficial Ownership Information) reports
- Covers updated and corrected BOI reports
- Affects companies that need to file initial beneficial ownership information
Special Deadline Exceptions:
- Companies with previously assigned deadlines beyond March 21, 2025 (such as those with disaster relief extensions) should adhere to their original later deadlines
- For example, companies with April 2025 deadlines due to disaster relief should maintain their April timeline
Important Considerations:
- FinCEN plans to assess options for further deadline modifications during the current 30-day extension
- The agency intends to revise BOI reporting rules this year to reduce burden on lower-risk entities
- Companies that have already filed reports should review them for necessary updates
- Given the possibility of additional extensions, companies might consider waiting until closer to the deadline to submit their reports
The situation remains fluid, with ongoing litigation that could potentially impact these requirements further. Companies should stay informed about potential changes while preparing to meet the current March 21, 2025 deadline.
The Corporate Transparency Act continues to face multiple challenges through both the courts and Congress. Most notably, the House of Representatives recently showed strong bipartisan support by unanimously passing H.R.736 on February 10. This bill would extend the compliance deadline to January 1, 2026 for companies formed before 2024. A similar bill is currently under consideration in the Senate. Additionally, several proposals to completely eliminate the CTA remain active in Congress, while various legal challenges, including the Smith case, continue moving through the court system.
WHAT IS THE CORPORATE TRANSPARENCY ACT?
The Corporate Transparency Act (CTA) is a federal law designed to enhance financial transparency and combat illicit activities such as money laundering, tax fraud, and terrorism financing. The law requires most U.S. businesses, including corporations, limited liability companies, and other similar entities, to report information about their beneficial owners – the individuals who ultimately own or control the company – to the Financial Crimes Enforcement Network (FinCEN). This information includes details such as names, birth dates, addresses, and identification documents of individuals who own 25% or more of the company or exercise substantial control over it. The reporting requirements apply to both newly formed companies and existing businesses, with specific deadlines for compliance. Small businesses are particularly impacted by this legislation, as they make up the majority of reporting companies, though certain entities like publicly traded companies, banks, and heavily regulated businesses are exempt from these requirements.