Corporate Transparency Act Back in Effect

Banking & Financial Institutions Capital Markets

Enforcement of the Corporate Transparency Act (the “CTA”) had been on hold as a result of an injunction issued by a federal district court judge in Smith v. U.S. Department of the Treasury. On February 5, the U.S. Department of Justice appealed this ruling and requested that the injunction be stayed during the appeal. On February 17, the district court agreed to stay the injunction until the appeal is completed. These rulings took place against the backdrop of a U.S. Supreme Court decision in a different case last month that allowed CTA enforcement to proceed.

As a result of these court orders, beneficial ownership information (“BOI”) reporting under the CTA is once again mandatory. However, the Financial Crimes Enforcement Network (“FinCEN”) is providing additional time for companies to report. For most reporting companies, the new deadline to file an initial, updated, and/or corrected beneficial ownership report is now March 21, 2025.

During this extension period, FinCEN “will assess its options to further modify deadlines, while prioritizing reporting for those entities that pose the most significant national security risks.” FinCEN also “intends 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.”

What does this mean for reporting companies?

Entities that have already filed their reports and have no reason to file an updated report do not need to do anything. Unless subject to a later deadline, entities that have not filed should do so by March 21, 2025.

As noted above, FinCEN may further modify its deadlines. Reporting companies that have not filed reports or need to file updated or corrected reports should closely monitor developments. There are numerous cases making their way through the courts, as well as bills in Congress that could impact BOI reporting.

Jonathan A. Greene is co-leader of the Banking & Financial Institutions practice group of Wyrick Robbins, and is also a member of the firm’s Capital Markets practice group.

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