The Corporate Transparency Act Strikes Back: Beneficial Ownership Reporting Is Now Required by March 21, 2025 | by: Chris Manderson

The on-again, off-again saga of the Corporate Transparency Act (CTA) is back on again. Following a February 18, 2025 court decision, Beneficial Ownership Information (BOI) reports for most entities will now be due by March 21, 2025. Businesses that paused compliance must now act quickly to meet this reinstated deadline.

The CTA, enacted in 2021, mandates entities to report their BOI to the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN). For further details on the CTA and its requirements prior to this injunction, please refer to our December 2023 client alert linked here.

Since its inception, the CTA has faced scrutiny and legal challenges, particularly from small business associations and privacy advocates who argue that the reporting requirements impose undue burdens on smaller entities. 

On December 3, 2024, in Smith, et al. v. U.S. Department of the Treasury, 6:24-cv-00336 (E.D. Tex.), the U.S. District Court for the Eastern District of Texas temporarily paused CTA-mandated BOI reporting requirements.[1] The injunction was stayed on December 23, 2024[2], and the stay was vacated on December 26, 2024[3], once again suspending reporting obligations.  However, as of February 18, 2025, the court lifted this pause, reinstating the reporting obligations under the CTA. 

Key Updates on BOI Reporting Requirements

1. Reinstatement of BOI Reporting Requirements:
   • On February 18, 2025, the U.S. District Court for the Eastern District of Texas lifted the temporary pause on BOI reporting requirements, reinstating the Corporate Transparency Act’s reporting mandates.
2. New Filing Deadline – March 21, 2025:
   • FinCEN has extended the filing deadline by 30 days to March 21, 2025, to give companies additional time to prepare their filings. This extension applies to most reporting companies and offers a critical window to collect and verify beneficial ownership information (BOI).
   • Companies that previously received extended deadlines due to specific circumstances, such as disaster relief or other qualified extensions, should adhere to those pre-approved later deadlines rather than the new March 21 date.
   • FinCEN has indicated that it will continue to monitor compliance challenges and may consider further extensions or adjustments to ease the reporting burden, particularly for small businesses.
3. Litigation-Specific Exemptions:
   • Certain entities involved in ongoing litigation remain exempt from the current reporting requirements. Specifically, plaintiffs in National Small Business United v. Yellen, including Isaac Winkles, companies where he is the beneficial owner or applicant, and members of the National Small Business Association (as of March 1, 2024), are not required to file BOI reports at this time.
   • It is essential for businesses involved in or affected by similar litigation to stay informed about their specific obligations, as exemptions may be temporary or subject to change depending on future court rulings.
4. Potential Revisions to the BOI Rule:
   • On February 10, the United States House of Representatives passed the Protect Small Businesses from Excessive Paperwork Act (H.R. 736) on a unanimous 408-0 vote. This bill would extend the reporting deadline to January 1, 2026. This bill will not become law unless also passed by the Senate and signed by the President.  There is a corresponding Senate bill that has not been voted upon yet.
   • FinCEN has announced plans to review and potentially revise the BOI reporting rules to reduce administrative burdens, particularly for lower-risk entities like small businesses. The review process is expected to focus on streamlining reporting obligations and identifying pathways to minimize compliance costs while maintaining the integrity of the CTA.
   • Businesses should monitor FinCEN updates closely, as proposed rule changes could impact reporting timelines, required data elements, or exemption categories.

What This Means for Your Business

• Determine Applicability:
  • Confirm whether your business qualifies as a "reporting company" under the CTA or if it falls under one of the law’s exemptions.
• Prepare for Compliance:
  • Gather required information for all beneficial owners, including full legal names, dates of birth, addresses, and identifying documents.
• Monitor for Further Changes:
  • FinCEN may announce additional extensions or changes before the March 21, 2025, deadline. Stay informed to ensure compliance.
• Avoid Penalties:
  • Non-compliance can result in significant civil and criminal penalties. Timely and accurate filing is essential.

Next Steps We recommend that all clients review their corporate structures and identify entities subject to BOI reporting. Our team is available to assist with compliance strategies and ensure timely filing to meet the March 21, 2025, deadline.

For more information or assistance, please contact Ervin Cohen & Jessup’s Corporate Law team.

[1] Please see ECJ’s Client Alert:  Corporate Transparency Act Blocked by Texas Federal Court from December 10, 2024 here https://www.ecjlaw.com/clientalert-217

[2] Please see ECJ’s Client Alert:  The Corporate Transparency Act is Still Alive, with New Reporting Deadlines from December 24, 2024 here https://www.ecjlaw.com/clientalert-218

[3] Please see ECJ’s Client Alert:  The Corporate Transparency Act is On Hold Again from December 27, 2024 here https://www.ecjlaw.com/clientalert-219