Corporate Transparency Act Back in Effect; For Now

On Feb. 17, the Texas federal district court in Smith v. U.S. Department of the Treasury granted the government’s motion for an immediate stay pending appeal of the nationwide order staying the effective date of the final rule establishing the Corporate Transparency Act’s reporting requirements and deadlines.

In a public alert published on February 19, FinCEN established a reporting deadline of March 21 for nearly all reporting companies to file an initial, updated and/or corrected beneficial ownership information report. The exceptions to this new deadline are limited to (i) those reporting companies that qualified for certain disaster relief extensions providing for a deadline later than March 21 and (ii) the plaintiffs in National Small Business United v. Yellen, No. 5:22-cv01448 (N.D. Ala.), for as long as that limited order remains in effect.

In the alert, FinCEN reiterated that before the reporting deadline, it will “assess its options to modify further deadlines while prioritizing reporting for those entities that pose the most significant national security risks.” FinCEN also indicated that it intends to begin a process to revise the BOI reporting rule to reduce the burden for lower-risk entities, including small businesses.

In its notice, FinCEN also seemed to imply that the new deadline could be further extended, stating that it “will provide an update before March 21 of any further modification of this deadline.”

Although FinCEN has established a reporting deadline of March 21, efforts are underway in Congress to delay the reporting deadline until January 1, 2026, including one bill that recently passed the House of Representatives with a 408-0 vote. That bill currently sits in front of the Senate, where the timing and odds of such an amendment being passed remain unclear.