Introduction
The Corporate Transparency Act (CTA) is one of the most significant regulatory changes affecting U.S. businesses in recent years. It was designed to combat financial crimes such as money laundering, fraud, and tax evasion. To achieve that goal, the CTA requires many companies to report their Beneficial Ownership Information (BOI) to the Financial Crimes Enforcement Network (FinCEN). This means businesses must disclose details about the individuals who own or control them, improving transparency in corporate structures.
Filing Requirements In Effect
Due to the information required and questions regarding the utilization of that data, the Corporate Transparency Act has faced a number of legal challenges questioning the CTA’s constitutionality, enforcement, and regulatory impact on businesses. Because of the legal challenges and various court actions, enforcement was put on hold. However, the February 18, 2025, decision by the U.S. District Court for the Eastern District of Texas in Smith, et al. v. U.S. Department of the Treasury, et al., 6:24-cv-00336 (E.D. Tex.) to remove the stay regarding the enforcement of the filing requirements of the CTA pending the current appeal, the beneficial ownership information (BOI) reporting requirements of the CTA are no longer on hold, and are again in effect.
New Deadline
In response to concerns about compliance challenges – particularly for small businesses and low-risk entities – FinCEN has extended the deadline by 30 days. The new due date for most companies is March 21, 2025. However, companies previously granted extensions (e,.g., for disaster relief and the 90 day window for newly formed entities) must adhere to their original later deadline. FinCEN also noted in its FinCEN Notice that was issued February 18, 2025, that it intended 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. At this time, it is unclear as to how FinCEN intends to modify its reporting requirements for small businesses.