On Again, Off Again…On Again: Corporate Transparency Act Now Back in Effect

On Again, Off Again…On Again: Corporate Transparency Act Now Back in Effect

It’s Back! The Corporate Transparency Act (the “CTA”) mandatory beneficial ownership reporting requirement is once again back in effect. Following a ruling in the Texas federal district court in the matter of Smith vs. U.S. Department of the Treasury, the injunction was lifted and the CTA’s mandatory reporting requirement has now been reinstated.

Anyone that owns 25% or more of a Corporation, LLC (including single member LLC), or Partnership, is again required to report ownership interests to the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN). For reports that were originally due from December 3, 2024, (e.g., the date of the first injunction of the CTA, in another case) through February 18, 2025, FinCEN granted a 30-day extension for reporting companies to comply with the CTA’s mandatory beneficial ownership reporting requirements. The new deadline for most reporting companies to file an initial, updated, and/or corrected BOI report is now March 21, 2025. Any reporting companies that have reporting deadlines later than March 21, 2025, such as those that qualify for disaster relief extensions due to federally declared disasters such as those reporting companies with principal places of business impacted by Hurricanes Milton, Helene, Debby, Beryl, and Francine, were given extended deadlines​.

Despite the new deadline of March 21, 2025, there is always a chance that other developments could once again change the CTA reporting requirement. Bills have been proposed in Congress to further delay the reporting deadline and to eliminate the CTA altogether, and the Trump Administration may take action. The Supreme Court is not scheduled to hear oral argument in the case in which the initial injunction was issued until April, which I after the new deadline. Lastly, the FinCEN Notice of the March 21 extension also states: “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.” Let’s hope this is true.

For more information, visit the following Financial Crimes Enforcement Network (FinCen) website at:

https://www.fincen.gov/boi. You can file the report directly via this website.

Below are some frequently asked questions (FAQ’s) contained on the FinCEN website that may be helpful. Visit the website https://www.fincen.gov/boi for additional filing information.

What is beneficial ownership information?

• Beneficial ownership information refers to identifying information about the individuals who directly or indirectly own or control a company.

 Under the Corporate Transparency Act, who can access beneficial ownership information?

• In accordance with the Corporate Transparency Act, FinCEN may permit access to beneficial ownership information to: Federal agencies engaged in national security, intelligence, or law enforcement activity;
• State, local, and Tribal law enforcement agencies with court authorization; Officials at the Department of the Treasury; Foreign law enforcement agencies, judges, prosecutors, and other authorities that submit a request through a U.S. Federal agency to obtain beneficial ownership information for authorized activities related to national security, intelligence, and law enforcement; Financial institutions with customer due diligence requirements under applicable law (in order to facilitate compliance with those requirements); and Federal functional regulators or other appropriate regulatory agencies that supervise or assess financial institutions with access to beneficial ownership information (in order to supervise such financial institutions’ compliance with customer due diligence requirements).
• FinCEN published the rule that will govern access to and protection of beneficial ownership information on December 22, 2023. Beneficial ownership information reported to FinCEN is stored in a secure, non-public database using rigorous information security methods and controls typically used in the Federal government to protect non-classified yet sensitive information systems at the highest security level. FinCEN will continue to work closely with those authorized to access beneficial ownership information to ensure that they understand their roles and responsibilities in using the reported information only for authorized purposes and handling in a way that protects its security and confidentiality.

Will there be a fee for submitting a beneficial ownership information report to FinCEN?

• No. There is no fee for submitting your beneficial ownership information report to FinCEN.

How will I be able to report my company’s beneficial ownership information?

• If you are required to report your company’s beneficial ownership information to FinCEN, you will do so electronically through a secure filing system available via FinCEN’s BOI E-Filing website (https://boiefiling.fincen.gov).

 Is a reporting company required to use an attorney, certified public accountant, enrolled agent, or other service provider to submit beneficial ownership information to FinCEN?

• No. FinCEN expects that many, if not most, reporting companies will be able to submit their beneficial ownership information to FinCEN on their own using the guidance FinCEN has issued. Reporting companies that need help meeting their reporting obligations can consult with professional service providers, such as lawyers, accountants, or enrolled agents.

What information will be collected on filers?

• When submitting the BOI report, individual filers should be prepared to provide basic contact information about themselves, including their name and email address.