Articles
Practice Areas
Attorneys
Corporate Transparency Act Back On
On February 17, 2025, the U.S. District Court for the Eastern District of Texas decided that the reporting requirements for beneficial ownership information (BOI) under the Corporate Transparency Act (CTA) are back on. This means that companies are once again required to report their BOI to the Financial Crimes Enforcement Network (FinCEN).
However, recognizing that businesses may need more time to comply, FinCEN has extended the deadline by 30 days from February 19, 2025. This means that most companies now have until March 21, 2025, to file their initial, updated or corrected BOI reports.
During the next 30 days, FinCEN also will be assessing options to further alter deadlines. It plans to prioritize reporting for businesses who may present substantial national security risks. Additionally, FinCEN plans to revise the BOI reporting rule in 2025 to lessen the burden on lower-risk companies. This encompasses many small businesses. However, business owners should plan to comply with the newly published deadlines.
If your company was previously given a reporting deadline later than March 21, you should follow that later deadline. For example, if your business is eligible for certain disaster relief extensions and has a deadline of April 1, 2025, you should adhere to the April 1 deadline. Furthermore, businesses who are members of the National Small Business Association currently are not required to report BOI to FinCEN. Under the CTA:
- entities formed on or after January 1, 2025, are required to file their reports within 30 days from the date of creation or registration.
- an entity formed after February 19, 2025, is required to file within 30 days of its date of formation.
- entities formed on or after January 1, 2025, but before February 19, 2025, must file the report by the March 21, 2025 deadline.
For those who need to report, you can do so directly using FinCEN’s free system.
Should you have any additional questions on CTA, please contact one of our Business Law attorneys.
Update:
On February 27, 2025, FinCEN announced it will refrain from issuing fines or assessing penalties (or take any other enforcement action) against companies who have not yet filed their Beneficial Ownership Information reports pursuant to the Corporate Transparency Act, until a forthcoming interim rule becomes effective and new deadlines have been published. FinCEN states it will issue an interim final rule that extends BOI reporting deadlines no later than March 21, 2025.
Subsequent communication published from the Treasury Department on March 2, 2025, stated that it would not “enforce any penalties or fines against U.S. citizens or domestic reporting companies or their beneficial owners after the forthcoming rule changes take effect.” Additionally, a proposed rule is in the works that, “will narrow the scope of the rule to foreign reporting companies only.” Business owners should monitor future updates and correspondence from FinCEN and the Treasury Department, but it appears at this time, no U.S. entity or citizen will be penalized for not filing a Beneficial Ownership Information Report pursuant to the Corporate Transparency Act.
____________________________
Disclaimer: This alert has been prepared by Eastman & Smith Ltd. for informational purposes only and should not be considered legal advice. This information is not intended to create, and receipt of it does not constitute, an attorney/client relationship.