On February 17, 2025, the nationwide preliminary injunction issued by the Smith court in Texas was lifted. This follows the U.S. Supreme Court’s lifting of a similar injunction in late January, a development we reviewed in The Corporate Transparency Act Is Still on Pause, but Less So.
Cutting to the chase, compliance with the CTA is required.
FinCEN, the Treasury Department office that manages the CTA, has given a thirty-day deadline within which all past-due filings are due. To that end:
- If you have a reporting company that existed before January 1, 2024 that has not yet filed its initial beneficial ownership information report (a “BOIR”), it must do so before March 21, 2025.
- If you have a reporting company that existed before January 1, 2024 that has filed its initial BOIR, and since that filing there have been changes in the filed information, an update must be filed before March 21, 2025.
In addition, subject to some technical qualifications:
- If you have a reporting company created on or after January 1, 2024 that has not yet filed its initial BOIR, it must do so before March 21, 2025.
- If you have a reporting company created on or after January 1, 2024 that has filed its initial BOIR, and since that filing there have been changes in the filed information, an update must be filed before March 21, 2025.
Going forward, for companies newly created in 2025, the initial BOIR must be filed within 30 days of the date of creation.
Please keep in mind that once a company has filed a BOIR, any change in the submitted information must be updated within 30 days of the event causing the change. For example, if your company changes its name or its principal place of business address, an update must be filed. This requirement applies just as much to information filed with respect to the beneficial owners of your company; if one of them changes his or her name or his or her residential address, these being just two examples, they need to notify the company and the company needs to file an updated BOIR. That filing is due within 30 days of the change, not 30 days of when the company becomes aware of the change. A parallel updating obligation exists for each beneficial owner who has a FinCEN ID.
There is an effort in Congress (it has already passed the House of Representatives) to enact legislation that would afford companies created before January 1, 2024 an additional year within which to make its initial BOIR filing. We are carefully tracking that and all other CTA developments. At this time, we have no comfort that this legislation will come into effect before March 21, 2025, and for that reason cannot recommend that you further delay in your CTA compliance efforts. If that proposal is passed we will be reaching out to you. Be aware that even if passed it will not impact the filing obligations of companies created on or after January 1, 2024 or the updating obligations of a company that has already filed its initial BOIR.
Please reach out to a member of the SKO CTA Practice Group for particular guidance as to your company and it’s filing obligations.
As we have previously reviewed, with only narrow exceptions, the CTA applies to almost every corporation and LLC, as well as certain other business forms such as limited partnerships, created in the U.S. or formed in another country and qualified to transact business in the U.S. Please reach out to a member of the SKO CTA Practice Group for particular guidance as to your company and its filing obligations.
