February 18, 2025 Update:
Following a court decision by the U.S. District Court for the Eastern District of Texas in Smith v. U.S. Department of the Treasury, beneficial ownership information (BOI) reporting requirements under the Corporate Transparency Act (CTA) have been reinstated. However, the Financial Crimes Enforcement Network (FinCEN) has extended the deadline for most companies to comply with BOI reporting requirements by 30 days, making the new deadline March 21, 2025. FinCEN is also considering further modifications to reduce compliance burdens, particularly for low-risk entities. Companies previously granted extended deadlines, such as those qualifying for disaster relief, should adhere to their original timelines. Certain plaintiffs in National Small Business United v. Yellen remain exempt.
This is a fluid and constantly evolving matter that “reporting companies” should continue to carefully watch. For further details please refer to FinCEN’s website. We will continue to monitor the developments of this case and circulate updates as they become available, please do not hesitate to reach out to our corporate team with any questions.
February 6, 2025 Update:
The nationwide injunction of the CTA issued in Smith v. U.S. Department of the Treasury remains in effect. On February 5, 2025, the Department of Justice filed an appeal of the ruling on behalf of the Department of the Treasury and separately sought to stay the order. FinCEN updated its website on February 6, 2025, stating that while the nationwide injunction issued in Smith remains in effect, the requirement for reporting companies to file BOI will continue to be voluntary. If the order is lifted, FinCEN will extend the reporting deadline by 30 days and will assess options to modify deadlines or reporting requirements for lower-risk entities.
January 24, 2025 Update:
On January 23, 2025, the Supreme Court stayed a nationwide injunction for the CTA in Texas Top Cop Shop v. McHenry. However, reporting companies are still not required to file beneficial ownership information with FinCEN due to a separate nationwide injunction issued in Smith v. U.S. Department of the Treasury. While the Smith order remains in effect, companies are not subject to liability for failing to file but may choose to submit reports voluntarily.
This is a fluid and constantly evolving matter that “reporting companies” should continue to carefully watch. For further details please refer to FinCEN’s website. We will continue to monitor the developments of this case and circulate updates as they become available.
December 27, 2024 Update:
As of December 26, 2024, the Fifth Circuit Court of Appeals issued an order vacating the stay of the preliminary injunction. This ruling means that for the time being, the injunction remains in effect and FinCEN does not have the authority to enforce BOI reporting requirements. This ruling comes just three days after a different Fifth Circuit panel lifted the injunction. As of December 27, 2024, FinCEN updated their website to indicate that submission of BOI Reports is voluntary for the moment. It remains unclear if FinCEN will further extend the January 13, 2025 deadline if the injunction is stayed or lifted again in the future.
December 23, 2024 Update on Fifth Circuit Temporary Stay:
On December 23, 2024, the Fifth Circuit Court of Appeals GRANTED the Government’s emergency motion for a temporary stay of the nationwide injunction that blocked enforcement of the CTA through Texas Top Cop Shop, Inc. et al. v. Garland et al., No. 4:24-cv-478 (E.D. Tex.; Dec. 3, 2024). This means that all “reporting companies” who have not already submitted their BOI reports with FinCEN should timely submit their BOI reports by the reporting deadlines to comply with the CTA.
The original reporting deadline for “reporting companies” formed prior to January 1, 2024 was January 1, 2025. FinCEN has now extended the initial filing deadline for these “reporting companies” from January 1, 2025 to January 13, 2025 (for further details please refer to FinCEN’s website).
We will continue to monitor the legal proceedings, and provide further updates to the CTA as they develop.
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