Corporate Transparency Act: Judge Clears Way for CTA; Reporting Requirements Back in Effect
- 2.20.2025
By: C. S. Avery Reaves and Jonathan Wolfman
For months, entities subject to the beneficial ownership information (“BOI”) reporting requirements of the Corporate Transparency Act (the “CTA”) have faced uncertainty as two orders granting preliminary nationwide injunctive relief paused the government’s efforts to enforce the CTA. On January 23, 2025, in Texas Top Cop Shop, Inc., et al. v. Bondi, et al. (E.D. Tex), the U.S. Supreme Court stayed the first, pending the appeal of the matter to the U.S. Court of Appeals for the Fifth Circuit. On February 17, 2024, District Court Judge Jeremy Kernodle followed suit, staying his own prior order in Smith, et al. v. U.S. Department of the Treasury, et al. (E.D. Tex) pending appeal. As a result, the Financial Crimes Enforcement Network (“FinCEN”) is no longer enjoined from enforcing the CTA, and BOI reporting requirements under the CTA are back in effect.
On February 19, FinCEN announced that the new deadline applicable to most entities required to file initial, updated, and/or corrected BOI reports has been set as March 21, 2025. However, entities that had previously been provided a later reporting deadline—such as those entities that are not required to make their initial filings on or before March 21, 2025, due to their date of creation or registration or that qualify for specified disaster relief extensions—are not required to file until such later deadline.
This situation remains fluid. FinCEN has noted that it is continuing to assess potential further modifications to the reporting deadlines and other measures to reduce the regulatory burdens associated with the reporting requirements. Court proceedings relating to the CTA remain ongoing in multiple jurisdictions. As previously discussed, the unanimous passage of the Protect Small Business from Excessive Paperwork Act of 2025 by the U.S. House of Representatives suggests that statutory relief remains a possibility. In light of these uncertainties, entities subject to BOI reporting requirements should remain vigilant and begin to finalize their BOI reports in preparation of the upcoming deadlines.
