Alert
Corporate Transparency Act Back in Effect and Extended Deadline
February 20, 2025
Authors
Mark M. Christopher
Director, Boston
mchristopher@goulstonstorrs.com+1 617 574 3513
David L. Coombs
Director, Boston
dcoombs@goulstonstorrs.com+1 617 574 3563
Gary M. Ronan
Director, Boston
gronan@goulstonstorrs.com+1 617 574 3593
Vaishali Goyal
Senior Attorney, Boston
vgoyal@goulstonstorrs.com+1 617 574 2242March 3, 2025, UPDATE: On February 27, 2025, the U.S. Treasury Department announced that it will not impose penalties on any failure to comply with the Corporate Transparency Act (“CTA”), and on March 2, confirmed that it will not enforce any penalties against U.S. citizens or domestic companies for failing to comply with the CTA by the March 21, 2025 deadline. The Department also plans to narrow the scope of the law’s reporting requirements to focus only on foreign companies, delaying enforcement until new rules are finalized.
In other words, submitting a beneficial owner report to FinCEN is effectively voluntary. Although these statements bring some clarity as to the future enforcement of the CTA for U.S. citizens and domestic companies, we cannot be certain what will occur with foreign companies.
February 20, 2025, ORIGINAL ARTICLE: On February 18, 2025, the U.S. District Court for the Eastern District of Texas lifted the nationwide injunction it had previously issued against the enforcement of the Corporate Transparency Act (CTA).1 As a result, the CTA reporting requirements are effective again.
In response, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”) has extended the deadline for most reporting companies by 30 days, moving the new deadline to March 21, 2025. Reporting companies that were granted later deadlines—such as those with disaster relief extensions to April 2025—should continue to follow their original deadlines. Unlike prior deadlines, there is no distinction between companies formed before or after January 1, 2024 in terms of the deadline.
During this 30-day period, FinCEN will assess the possibility of further deadline changes and focus on prioritizing reporting from entities that pose higher national security risks. Additionally, FinCEN plans to revise the BOI reporting rule later this year to reduce the administrative burden on lower-risk businesses, including many small U.S. businesses.
However, it is unclear whether any changes will occur before the March 21, 2025 deadline.
What This Means for Your Reporting Company:
- The CTA reporting requirements are back in effect.
- If you do not have significant business or privacy concerns, you should submit your filings now.
- If you have concerns, prepare your materials to file closer to the deadline if no updated guidelines or deadlines are issued.
- New deadline for companies: March 21, 2025 (unless your reporting company has a later deadline).2
Please contact your Goulston & Storrs attorney if you have any questions.
1 Background on Court Cases:
- On December 3, 2024, the U.S. District Court for the Eastern District of Texas issued a nationwide injunction in Texas Top Cop Shop, Inc., et al. v. Merrick Garland, et al. On January 23, 2025, the Supreme Court ordered that the injunction be lifted.
- On January 7, 2025, the same U.S. District Court issued another nationwide injunction in Smith v. U.S. Department of the Treasury. On February 18, 2025, the court lifted its injunction. With no more nationwide injunctions in place, the CTA came back into effect. The Department of Justice has filed an appeal, and the injunction will remain lifted until the appeal is completed.
2 The CTA is still not being enforced against the plaintiffs in National Small Business United v. Yellen.
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