CLIENT ALERT
By Attorney Seamus Cuddy
February 25, 2025
On February 17, 2025, a federal judge in Texas lifted the preliminary injunction issued in Smith v. United States Department of the Treasury. As reported in our most recent update, this case represented the last remaining nationwide preliminary injunction with respect to enforcement of the Corporate Transparency Act (“CTA”). On February 18, 2025, following the issuance of the court’s decision, the Financial Crimes Enforcement Network (“FinCEN”) announced that the beneficial ownership information (BOI) reporting requirements under the CTA that had been paused since December 2024 are once again back in effect—but with updated deadlines.
New Deadline
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 have or were previously given a reporting deadline later than that date may file by the later deadline. This includes entities that were formed at the end of December 2024, entities formed after February 19, 2025, and entities entitled to disaster relief extensions.
All non-exempt reporting companies formed after February 19, 2025 will have 30 days from the date of formation to file their initial BOI reports. Similarly, reporting companies will have 30 days to report any changes to previously filed reports occurring after February 19, 2025.
In its announcement, FinCEN stated that it plans to continue assessing its options to further modify deadlines, while prioritizing reporting for those entities that pose the most significant national security risks. But it is unclear when FinCEN might announce any specific modifications.
Ongoing Litigation and Legislation
While there remain numerous cases challenging the constitutionality of the CTA working their way through the courts, it is unlikely that final decisions will be rendered prior to the current March 21, 2025 deadline. It is, however, possible that Congress will take action. Prior to the issuance of the Smith decision, the U.S. House of Representatives overwhelmingly passed H.R. 736 – Protect Small Businesses from Excessive Paperwork Act of 2025, which proposes to extend the BOI reporting deadline to January 1, 2026, but only for reporting companies formed prior to January 1, 2024. A related bill was introduced in the U.S. Senate on February 11, 2025.
Next Steps
Given the current landscape, all reporting companies that have not yet filed their initial BOI reports should begin preparations to do so by the extended March 21, 2025 deadline. Given the possibility of additional deadline extensions and reporting exemptions, some reporting companies may wish to wait until closer to the March deadline to complete their required filings, as once an initial filing has been made, reporting companies assume an ongoing obligation to update the information they provide to FinCEN. Reporting companies who have filed their initial BOI reports should review the information provided in those filings to determine if any updates or corrections need to be completed prior to the extended deadline.
Reporting companies should continue to closely monitor developments, as the penalties for non-compliance are substantial. If you have questions about your company’s obligations under the CTA that you wish to discuss before the filing deadline, please reach out to your Sheehan Phinney team to schedule a consultation now.
This article is intended to serve as a summary of the issues outlined herein. While it may include some general guidance, it is not intended as, nor is it a substitute for, legal advice.