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Client Alert: Mandatory CTA Compliance Returns – What You Need to Know

Update – Nationwide Injunction Lifted; CTA Compliance Deadlines Restored

Date: February 20, 2025
On February 17, 2025, the U.S. District Court for the Eastern District of Texas lifted the last remaining nationwide injunction against enforcement of the Corporate Transparency Act (CTA) previously issued in Smith v. US Dep’t of the Treasury, clearing the way for the law’s implementation. This marks a significant development following the U.S. Supreme Court’s January 23, 2025, order in McHenry v. Texas Top Cop Shop, Inc., which lifted a separate nationwide injunction issued by another Texas federal district court. However, due to delays in the Justice Department’s motion in Smith, the CTA’s implementation remained blocked nationwide until now.
 
Current Status of the CTA
 
With the last remaining national stay lifted, reporting companies (entities registered with a state or tribal authority unless exempt under CTA’s narrow exemptions found here) are required to file Beneficial Ownership Information (“BOI”) reports. The Financial Crimes Enforcement Network (“FinCEN”), a bureau with the U.S. Department of Treasury, that is responsible for the implementation and enforcement of the CTA, on February 19, 2025, published the following guidance:
 
  • New Filing Deadline: Due to the nationwide injunctions that temporarily paused reporting requirements, the BOI filing deadline is extended by thirty days to give reporting companies additional time to comply. Most reporting companies must now file by March 21, 2025. This deadline applies to all companies that have not yet submitted their reports, except for certain entities in disaster recovery areas that have been granted further extensions.
  • Potential Extensions: FinCEN is considering further deadline adjustments during this 30-day period, prioritizing high-risk reporting companies while exploring ways to ease regulatory burdens on businesses.
  • Regulatory Changes Ahead: FinCEN plans to revise BOI reporting rules to reduce the compliance burden on lower-risk reporting companies, particularly small businesses.
  • Exemptions: The specific parties involved in National Small Business United v. Yellen are not required to file at this time.
 
CTA Filing Deadlines by Category
 
  • Reporting Companies Formed Before January 1, 2024: March 21, 2025.
  • Reporting Companies Formed During CTA Injunctions (December 3, 2024 – February 17, 2025): March 21, 2025.
  • Reporting Companies Formed After February 19, 2025: 30 days after the formation of the entity.
 
Entities should proceed with filing as soon as possible to ensure compliance and avoid penalties.
 
Key Legal Developments to Watch
 
Several court cases and legislative efforts could influence the enforcement of the CTA. The Yellen case is currently awaiting a decision in the 11th Circuit, which could impact the constitutionality or scope of the CTA. Meanwhile, the 5th Circuit is set to hear oral arguments in Texas Top Cop Shop on April 1, 2025, potentially leading to further challenges to the law’s enforcement. On the legislative front, H.R. 736 — the Protect Small Business from Excessive Paperwork Act of 2025 — has passed the U.S. House of Representatives with overwhelming bipartisan support and is now awaiting Senate action. If enacted, it would extend the CTA reporting deadline for entities formed before 2024 to January 1, 2026, giving such businesses an additional year to comply.
 
Conclusion

The BOI reporting requirements are back in effect and entities must comply by their applicable deadline. Non-compliance could result in substantial fines and penalties.
 
While FinCEN is considering ways to reduce the burden on small businesses, no additional changes have been confirmed yet. And, given the potential legislative delays, entities should promptly proceed with filing.
 
We will continue to monitor this case closely and provide updates on any significant developments.
The information contained here is not intended to provide legal advice or opinion and should not be acted upon without consulting an attorney. Counsel should not be selected based on advertising materials, and we recommend that you conduct further investigation when seeking legal representation.