The Corporate Transparency Act (CTA) has been a key legislative measure aimed at increasing financial transparency and combating illicit financial activities. However, a recent court ruling temporarily disrupted its implementation, creating uncertainty for businesses required to comply with its reporting requirements. Now, following a decision by the U.S. District Court for the Eastern District of Texas on February 18, 2025, in Smith, et al. v. U.S. Department of the Treasury, et al., 6:24-cv-00336, the Financial Crimes Enforcement Network (FinCEN) has announced that the beneficial ownership information (BOI) reporting requirements under the CTA are back in effect.
New Reporting Deadline: March 21, 2025
Businesses previously subject to these reporting requirements should take note of the new compliance deadline: March 21, 2025. This deadline applies to most companies, ensuring that FinCEN can continue its efforts in maintaining transparency within the corporate structure of businesses operating in the U.S.
FinCEN’s Plans for Further Adjustments
In addition to reinstating the reporting requirements, FinCEN has also indicated that it is assessing potential modifications to the deadlines. The agency aims to prioritize reporting for entities that pose the greatest national security risks while easing the burden for lower-risk businesses.
To this end, FinCEN has announced plans to initiate a process this year to revise the BOI reporting rule. These revisions are expected to focus on reducing the compliance burden on smaller businesses and lower-risk entities, helping them meet regulatory obligations more efficiently.
What Businesses Need to Know
If your company is subject to the CTA’s reporting requirements, here are some key takeaways:
- The BOI reporting requirements are back in effect following the court ruling.
- The new deadline for compliance is March 21, 2025.
- FinCEN is evaluating further modifications to prioritize high-risk entities and ease the reporting process for smaller businesses.
- Future revisions to the BOI reporting rule could reduce compliance burdens, particularly for small business owners.
- FinCEN continues to issue updates regarding the implementation of the CTA and its reporting obligations. Business owners and financial professionals should stay informed and monitor FinCEN’s official communications. For more details, you can access FinCEN’s official notice here.
