Important Update: Corporate Transparency Act (CTA) & Beneficial Ownership Information (BOI) Reporting.
The Wall Street Journal recently reported that the Corporate Transparency Act, which requires millions of companies to disclose their true ownership to the government, is once again in effect.
This follows the reversal of a previous injunction by a federal judge in Texas.
Following the latest court decision from the U.S. District Court for the Eastern District of Texas, the BOI reporting requirements under the CTA are now fully reinstated. The previous injunction blocking these requirements has been lifted.
Key Points:
- BOI reporting is once again mandatory
- FinCEN has extended the filing deadline to March 21, 2025
- This applies to both initial filings and updates
- Companies with overdue filings now have until the new deadline to comply
This extension provides reporting companies with approximately one month to prepare and submit their required BOI reports to FinCEN.
Background
The Corporate Transparency Act (CTA) requires certain domestic and foreign private companies to report their beneficial owners to the Financial Crimes Enforcement Network (FinCEN). This U.S. Treasury Department bureau fights financial crime. Beneficial owners are individuals who either significantly control or own these companies.
Congress enacted the CTA specifically to combat the misuse of shell companies for illegal activities. By requiring companies to report their true owners, the law gives law enforcement better visibility into company ownership structures, making it harder for criminals to hide behind corporate entities for money laundering or financing terrorism.
After two months of legal challenges and uncertainty surrounding beneficial ownership information reporting, the ride appears to be over. A federal district court in Texas lifted the final nationwide injunction on February 17th. This injunction had halted mandatory small business filings since December, but its removal now clears the way for these filings to proceed.
Acknowledging the recent legal fluctuations surrounding beneficial ownership information (BOI) reporting, the U.S. Treasury Department has granted a 30-day grace period for companies to comply with BOI reporting requirements. However, FinCEN retains the right to adjust this deadline further given the evolving legal landscape.
The official BOI reporting deadline is now March 21, 2025, but this date may not apply to all entities
If your company was previously assigned a deadline later than March 21, 2025, you must adhere to that later date. For instance, companies granted filing extensions due to disaster relief (e.g., an April deadline) should follow the deadline specified in their relief notification, not the new March 21st date.
The law firm JD Supra reported that FinCEN also notes that some entities, such as plaintiffs and certain members of the National Small Business Association, involved in case number 5:22-cv-01448 (National Small Business United v. Yellen), are currently exempt from filing pending the case’s outcome.
Filing the Beneficial Ownership Information report is free and can be done electronically through FinCEN’s E-Filing system at https://boiefiling.fincen.gov/ or via FinCEN’s BOI Information page.
Finally, all qualifying entities are hereby notified that BOI reporting requirements are once again in effect as of February 18, 2025.
