The Corporate Transparency Act: Back in Effect
February 21, 2025 | Aimee Moore
On February 18, 2025, the last remaining nationwide temporary injunction that prevented the enforcement of the Corporate Transparency Act (CTA) was lifted. This means that the CTA’s beneficial ownership information (BOI) reporting requirements are once again in effect, with a new compliance deadline of March 21, 2025, for most companies.
The CTA has been subject to an ongoing series of court battles since it went into effect on January 1, 2024, and numerous other court challenges continue to work their way through the court system. Moreover, as indicated below, several developments within the executive and legislative branches suggest that the CTA and its reporting rules are still subject to change.
While there was some conflicting information during the campaign creating uncertainty about the second Trump Administration’s stance on the law, it has since indicated its intention to defend both the constitutionality and enforcement of the CTA. This position is reflected in the briefs filed in several cases, one of which led to the reinstatement of the CTA.
Following the reinstatement of the CTA, the Financial Crimes Enforcement Network (FinCEN) announced that over the next 30 days, it “will assess its options to further modify deadlines, while prioritizing reporting for those entities that pose the most significant national security risks. FinCEN 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.”
Separately, on February 10, 2025, the U.S. House of Representatives unanimously passed a bill that would extend the initial reporting deadline for companies formed before 2024 to January 1, 2026. A similar bill was introduced in the Senate on February 12 and referred to the Senate Banking, Housing, and Urban Affairs Committee.
Given the uncertainty about potential outcomes in both the executive and legislative branches, clients should stay alert for further updates from Sherrard Roe, as additional developments or rulings may impact their compliance obligations under the CTA. In the interim, since penalties for noncompliance are (at least theoretically) fairly severe, Sherrard Roe continues to advise clients to file and comply with the CTA.
Should you want our assistance considering the applicability of the CTA to your organization or complying with its filing requirements, please reach out to your primary Sherrard Roe attorney or one of the leaders of our CTA compliance team – Will Pugh or Lindsay Dial.
