CTA Reinstated and Other Potential Developments

By Michael High, Brittany Michaud, and Andrew Sweeney

February 21, 2025

On February 18, 2025, the United States District Court for the Eastern District of Texas stayed its injunction barring the enforcement of the Corporate Transparency Act (CTA) pending appeal[1], effectively reinstating the CTA’s beneficial ownership information (BOI) reporting requirements. FinCEN has issued new deadlines for compliance with the CTA. For reporting companies that otherwise would have been required to file their BOI reports between December 3, 2024 and March 21, 2025 but for the ongoing litigation, the new deadline to file their BOI reports is March 21, 2025. For reporting companies formed on or after February 20, 2025, the new deadline is 30 days after formation.

In addition to the ongoing litigation, there are two other developments of note that may affect the future filing requirements for reporting companies. First, FinCEN in guidance published on February 19, 2025, stated that “in keeping with Treasury’s commitment to reducing regulatory burden on businesses, during this 30-day period FinCEN will assess its options to further modify deadlines, while prioritizing reporting for those entities that pose the most significant national security risks…[and] also intends to initiate a process this year to revise the BOI reporting rule to reduce burden for lower-risk entities, including many U.S. small businesses.”

Second, legislation is working its way through the United States Congress that may affect the obligations of reporting companies under the CTA. If enacted, the Protect Small Business from Excessive Paperwork Act of 2025 would provide relief to reporting companies formed prior to January 1, 2024, by extending the deadline for their initial filings until January 1, 2026. The effect of these two developments, if any, remains to be seen.

If you have any questions, please contact your principal at Drummond Woodsum and more generally you may want to consult our prior alerts which can be found at: Corporate Transparency Act Requirements Reinstated; UPDATE on the Corporate Transparency Act – Drummond Woodsum; The CTA: Time is Running Out – Drummond Woodsum; Get Ready for the Corporate Transparency Act – Drummond Woodsum.

[1]  Smith, et al. v. U.S. Department of the Treasury, et al., 6:24-cv-00336 (E.D. Tex.).