FinCEN Resumes Corporate Transparency Act Enforcement

The last remaining nationwide injunction prohibiting enforcement of the Corporate Transparency Act (CTA) has been stayed, clearing the way for the federal government to resume enforcing the CTA.

In the case of Smith, et al. v. U.S. Department of the Treasury, District Court Judge Jeremy Kernodle stated that, in light of the Supreme Court’s recent order in the Texas Top Cop Shop litigation, he would stay his previously issued nationwide injunction pending disposition of the matters on appeal.

As a result of Judge Kernodle’s order, the federal government may proceed to enforce the CTA and FinCEN intends to do so, stating that “beneficial ownership information (BOI) reporting obligations are once again back in effect.” 

FinCEN also extended the reporting deadline for most companies.

For the vast majority of reporting companies, the new deadline to file an initial, updated, and/or corrected BOI report is now March 21, 2025. Reporting companies that were previously given a reporting deadline later than the March 21, 2025 deadline must file their initial BOI report by that later deadline. For example, if a company’s reporting deadline is in April 2025 because it qualifies for certain disaster relief extensions, it should follow the April deadline, not the March deadline.

Further adjustments to reporting deadlines and obligations could occur. FinCEN stated that, during the current thirty-day extension period, it will “assess its options to further modify deadlines, while prioritizing reporting for those entities that pose the most significant national security risks.” FinCEN further stated that it “intends to initiate a process this year to revise the BOI reporting rule to reduce burden for lower-risk entities, including many U.S. small businesses.”  Litigation in the Texas Top Cop Shop and Smith v. Treasury cases is ongoing and the plaintiffs in these cases could prevail on their claims.

Because the CTA is back in effect, reporting companies should be prepared to file their BOI reports by March 21, 2025. Reporting companies that have already filed their initial beneficial ownership reports should review those reports to determine if they need to submit updated filings (e.g., because the previously reported information has changed).

Given the possibility of further extensions being granted before March 21, 2025, reporting companies may want to refrain from submitting their BOI reports until a date that is closer to the applicable reporting deadline.