KingSpry Business Law Attorney, Taisha K. Tolliver-Duran, Esq., has kept abreast of the litigation impacting the Corporate Transparency Act, and details what business entities must know to remain compliant when the Act takes effect again next month.
Background
The Corporate Transparency Act (the “CTA”) is a federal law that imposes filing requirements on nearly every corporation, limited liability company, or similar business entities formed in or registered to do business in the United States. Under the CTA, beneficial ownership information (“BOI”) must be reported to the United States Department of Treasury’s Financial Crimes Enforcement Network (“FinCEN”). Additionally, the CTA imposes severe penalties for failure to comply with reporting obligations.
BOI reports must be filed by domestic and foreign reporting companies (“reporting companies”). Domestic reporting companies are any corporation, limited liability company, or entity created by the filing of a document with a secretary of state (or similar office). Foreign reporting companies are any corporation, limited liability company, or entity formed under the law of a foreign country and registered to do business in the United States or tribal jurisdiction by the filing of a document with a secretary of state (or similar office).
Federal Texas Court
On February 18, 2025, the United States District Court for the Eastern District of Texas lifted its own January 7, 2025 Order in Smith, et al. v. U.S. Department of the Treasury, et al., 6:24-cv-00336 (E.D. Tex.). Meaning, the CTA will take effect again, and reporting companies are required to file BOI reports with FinCEN.
FinCEN’s Update
In its February 18, 2025 Notice, FinCEN confirmed that BOI reporting requirements under the CTA are back in effect. However, because reporting companies may need additional time to comply with their BOI reporting obligations, FinCEN is “generally extending[ing] the deadline 30 calendar days from February 19, 2025, for most [reporting] companies.”
According to FinCEN, the new deadline for most reporting companies to file an initial, updated, and/or corrected BOI report is now March 21, 2025. Reporting companies that were previously given a reporting deadline later than the March 21, 2025 deadline must file their initial BOI report by that later deadline.
Key Takeaways for Businesses
As next month’s deadline approaches, reporting companies should proactively gather information and file their BOI reports with FinCEN. Reporting companies should thoroughly understand their obligations under the CTA and consult with legal counsel to ensure compliance.
For more information, contact KingSpry’s Business Law Practice Group or review our previous articles: What the Corporate Transparency Act Means for Business Entities, The New Corporate Transparency Act Impacts Businesses Across the United States, Court of Appeals Lifts Preliminary CTA Injunction, What Is the Status of the Corporate Transparency Act?.
KingSpry’s Business Law Practice Group will continue to monitor developments regarding the implementation and enforcement of the Corporate Transparency Act and is prepared to assist your business to ensure compliance. Should you or your business have questions or concerns, contact KingSpry’s Business Law Practice Group. This article is meant to be informational and does not constitute legal advice.
