Corporate Transparency Act Update
Earlier this week the U.S. District Court for the Eastern District of Texas in Smith, et al. v. U.S. Department of the Treasury, et al., Case No. 6:24-cv-00336 (E.D. Tex.), stayed its preliminary injunction enjoining the reporting rules contained in the Corporate Transparency Act (the “CTA”). Accordingly, and absent any changes between now and the updated deadline, the majority of Reporting Companies (as defined in the CTA) are now required to file their initial, amended, or corrected beneficial ownership information reports (“BOI Reports”) by Friday, March 21, 2025.
Why This Matters: The beneficial ownership information reporting requirements of the CTA are now mandatory. Potential penalties for noncompliance could be severe. The new filing deadlines to comply with the CTA are:
- For most reporting companies, the new deadline to file an initial, updated, and/or corrected BOI Report is now Friday, March 21, 2025.
- Reporting Companies formed or registered on or after February 18, 2025 must file within thirty (30) days from the date of creation or registration.
- Reporting Companies previously provided with extended deadlines due to disaster relief should follow their later deadlines.
Interestingly, in its notice, FinCEN also noted that during this period, it “would assess its options to further modify deadlines, while prioritizing reporting for those entities that pose the most national security risks,” and that it intends to review the CTA’s reporting rule to reduce burdens for lower-risk, small business entities. This remains a rapidly evolving issue and we anticipate further updates between now and March 21, 2025. We will continue to review and monitor the situation and keep you apprised of the latest developments. Please feel free to reach out to Rich Bar (rbar@gkglaw.com) or Frank Beninato (fbeninato@gkglaw.com) if you have any questions.
