Client Alert: Corporate Transparency Act Reporting Requirements are Back in Effect
On January 23, 2025, the U.S. Supreme Court granted the government’s motion to stay the nationwide injunction suspending enforcement of the Corporate Transparency Act (“CTA”) that was previously issued by the U.S. District Court for the Eastern District of Texas in the case of Texas Top Cop Shop, Inc. v. McHenry (formerly Texas Top Cop Shop, Inc. v. Garland). While the government’s motion was pending before the Supreme Court on the McHenry case, the U.S. District Court for the Eastern District of Texas issued a second nationwide injunction suspending CTA enforcement on January 7, 2025 in connection with a separate case (Smith v. U.S. Department of the Treasury).
On February 5, 2025, the U.S. Department of Justice (“DOJ”) – on behalf of the U.S.
Department of the Treasury (“Treasury”) – filed a notice of appeal from the Texas Court’s order
imposing the secondary CTA injunction in the Smith case, along with a parallel motion to stay the
injunction pending the outcome of the appeal. In response to the government’s motion and
notice of appeal, on February 18, 2025, the Texas District Court agreed to stay its second CTA
injunction pending the outcome of the government’s appeal of the order in the Smith case. In
the wake of these decisions, the Treasury’s Financial Crimes Enforcement Network (“FinCEN”)
issued a notice announcing that “beneficial ownership information (BOI) reporting
requirements under the Corporate Transparency Act (CTA) are once again back in effect.”
In recognition of the fact that reporting companies may need additional time to comply
with their BOI reporting obligations, FinCEN’s notice indicates that CTA reporting deadlines for
all reporting companies will generally be extended to thirty (30) calendar days from February 19,
2025. 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.
FinCEN also intends to initiate revisions to the CTA’s BOI reporting rule to reduce the burden for
lower-risk entities, including many U.S. small businesses.
What This Means for Reporting Companies
In light of the foregoing, any reporting companies that have not yet filed their BOI reports
and are not covered by one of the CTA’s twenty-three (23) filing exemptions will be required to
file their BOI reports on or before March 21, 2025, barring either (i) further developments in the federal lawsuits challenging enforceability of the statute; or (ii) further modification of the
deadline by FinCEN. Reporting companies should consult with their CTA advisors to gather the
information and materials needed to prepare and submit their BOI reports in time for this new
filing deadline, and/or to otherwise determine their potential eligibility for one or more CTA filing
exemptions.
If you have any questions regarding compliance under the Corporate Transparency Act or
require assistance in meeting reporting obligations, please contact Brian W. Bisignani, Chair of
the Firm’s Bankruptcy & Creditors’ Rights Practice Group, Ryan W. Morris of the Firm’s Corporate Practice Group, or the lawyer at the Firm with whom you regularly consult.
About the Authors
Brian W. Bisignani is a Principal and Chair of the Firm's Bankruptcy & Creditors' Rights Group. His practice encompasses the areas of business reorganizations and financial restructurings, commercial bankruptcy law and litigation, commercial loan restructurings, and corporate and business law.
Ryan W. Morris is an Associate in the firm's Corporate Practice Group. He concentrates his practice in the areas of business and corporate law, with an emphasis on assisting clients with matters related to entity formation and governance, regulatory compliance, corporate transactions, and general business counseling. As part of his practice, Mr. Morris routinely reviews, drafts and negotiates complex commercial contracts and agreements, and advises businesses on long-term strategies for the development and protection of their intellectual property and branding through the use of copyrights, trademarks, and trade secrets. Mr. Morris's clients include both public and privately-held for-profit companies and nonprofit organizations of varying sizes, with operations spanning multiple industries, including health care, banking and financial services, retail and hospitality, manufacturing, construction, transportation, consulting, and professional services.