The Corporate Transparency Act (CTA), enacted in 2021, mandates that companies disclose their true ownership to the Financial Crimes Enforcement Network (FinCEN) to combat illicit financial activities. However, its implementation has faced legal challenges, leading to injunctions that have temporarily halted its enforcement.
On February 18, 2025, the U.S. District Court for the Eastern District of Texas lifted a prior injunction, reinstating the CTA’s beneficial ownership reporting requirements. In response, FinCEN has extended the reporting deadline for most companies to allow additional time for compliance.
What You Need to Know
- For most reporting companies, the new deadline to file initial, updated, and/or corrected Beneficial Ownership Information Reports (BOIRs) is March 21, 2025.
- Reporting companies formed or registered on or after February 18, 2025, must file initial BOIRs within 30 days from the date of creation or registration.
- Reporting companies previously provided with extended deadlines due to disaster relief should follow the later deadlines.
FinCEN has also indicated it will explore further modifications to the reporting deadlines and intends to revise the beneficial ownership reporting rule to reduce burdens on lower-risk entities, including many small businesses.
Ongoing Litigation and Legislative Developments
The reinstatement of the CTA’s reporting obligations comes amid ongoing legal and legislative uncertainty. While FinCEN is moving forward with implementation, congressional efforts to amend or repeal the law continue to develop. Additionally, future litigation could further impact the scope or enforcement of the CTA’s reporting requirements.
