Since its implementation in early 2024, the Corporate Transparency Act (CTA) has introduced significant new compliance requirements for many U.S. businesses.
Scroll down to see the latest update.
Designed to combat financial crimes like money laundering and fraud, the CTA requires most corporations and LLCs to file Beneficial Ownership Information Reports (BOIR). These reports disclose key details about individuals who own or control these entities.
Despite its intentions, the CTA has faced criticism for imposing new burdens on businesses and questions about its constitutionality. In April 2024, a limited injunction temporarily paused the law for certain plaintiffs.
Earlier this month, a federal court ruling in Texas Top Cop Shop, Inc. v. Garland, No. 4:24-cv-478 (E.D. Tex.), found the CTA likely unconstitutional and issued a nationwide preliminary injunction that halts enforcement of the CTA altogether. This development impacts all businesses required to file a BOIR, temporarily suspending compliance deadlines and creating uncertainty about the law’s future.
While this ruling is not final, it effectively halts compliance deadlines for now. Here’s what businesses need to know about this recent ruling and how to navigate the current pause in compliance.
Impact and Exemptions
The court’s decision stems from concerns that the CTA may be unconstitutional. For now, businesses of all types, including those previously required to file a BOIR, are not obligated to meet the reporting deadlines.
Unlike the previous injunction issued in April 2024 in National Small Business United v. Yellen, No. 5:22-cv-01448 (N.D. Ala.), which was limited to the plaintiffs in that case, this month’s injunction applies to all entities across the U.S., not just those directly involved in the lawsuit.
Some exemptions under the original CTA requirements included entities like tax-exempt entities, financial institutions, and large operating businesses. However, as enforcement is suspended, these exemptions are temporarily irrelevant.
Compliance Deadlines and Considerations
Under the original rules, entities formed in 2023 or earlier were required to file a BOIR by January 1, 2025. For entities formed in 2024, the deadline was within 90 days of formation. These deadlines are now on hold.
Since the injunction is preliminary, it’s possible that the BOIR requirement could be reinstated with new deadlines. Businesses should pause compliance efforts for now but remain informed as the case develops. The government has appealed the ruling, but a resolution through the courts is likely still months away.
For businesses, this pause offers breathing room, but staying prepared is wise. We’ll continue to monitor updates and provide guidance as more information becomes available.
Corporate Transparency Act Updates
March 2025 Update
On March 2, 2025, the U.S. Treasury Department announced that it will not enforce penalties against domestic entities for noncompliance with the Corporate Transparency Act. The law itself, including the requirement to file the BOIR by March 21, 2025 and the requirement to update your BOIR information, is still on the books. However, the entity that would enforce this requirement – the Treasury Department – has stated that enforcement is currently suspended.
Please reach out to our office if you have any questions regarding this new update.
February 2025 Update
There has been yet another important development concerning the Corporate Transparency Act and the Beneficial Ownership Information Report (BOIR) that will require quick action from affected entities. On February 18, 2025, the U.S. District Court for the Eastern District of Texas granted FinCEN a stay order on its previously issued preliminary nationwide injunction on the enforcement of the Corporate Transparency Act (CTA).
As a result, filing a BOIR is once again mandatory.
- For the majority of reporting companies, the new deadline to file an initial, updated, and/or corrected BOIR is now March 21, 2025.
- Companies formed or registered on or after February 18, 2025, must file 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.
You can obtain additional information and file your BOIR at https://fincen.gov/boi.
December 2024 Update
There has been yet another development concerning the Corporate Transparency Act and the Beneficial Ownership Information Report (BOIR) that will require quick action from affected entities.
On December 23, 2024, the United States Court of Appeals for the Fifth Circuit stayed the preliminary injunction on enforcement of the Corporate Transparency Act, which was issued by the United States District Court for the Eastern District of Texas on December 3, 2024. This means that the Beneficial Ownership Information Report (BOIR) requirements are back in effect with extended deadlines.
- Reporting companies that were created or registered prior to January 1, 2024, now have until January 13, 2025 to file their report.
- Reporting companies created or registered after September 4, 2024, have until January 13, 2025 to file their report.
- Reporting companies that were created or registered on or after December 3, 2024 but before December 23, 2024, have an additional 21 days from their original filing deadline to file their report.
We know these rapid changes can be frustrating and disorienting, so please feel free to reach out to our office if you have any questions or would like further clarification on when your report needs to be filed.