Corporate Transparency Act Back in Effect! Judge Stays Preliminary Injunction
On February 17, 2025, Judge Jeremy Kernodle of the Eastern District of Texas granted the federal government’s request to stay the preliminary injunction granted in Smith v. U.S. Department of the Treasury, 6:24-cv-00336 (E.D. Tex.). This was the last injunction in place blocking the enforcement of the Corporate Transparency Act (the “CTA”). Accordingly, the CTA is now back in effect.
FinCen, the federal agency charged with enforcing the CTA, previously announced that, in the event the injunction was stayed, it would “extend the reporting deadline for all reporting companies 30 days from the date the stay is granted.”[1] FinCen has now announced that the new deadline for filing beneficial owner reports is March 21, 2025.[2]
However, FinCen also stated that it will “assess its options to modify further deadlines, while prioritizing reporting for those entities that pose the most significant national security risks.”[3]
Thus, it is essential that business owners regularly check FinCen’s website for updates, as it appears that the agency may offer some relief to some types of businesses.
Other relief may come in the form of legislation currently working its way through Congress. The Protect Small Business from Excessive Paperwork Act of 2025 (the “Act”), which the House of Representatives unanimously passed, would extend the deadline to report beneficial ownership information to January 1, 2026. However, the extension in the Act, if passed by the Senate, would only apply for companies formed prior to January 1, 2024.
The Fifth Circuit Court of Appeals is also set to hear oral arguments on whether the CTA is constitutional on April 1, 2025.
[2] See https://fincen.gov/sites/default/files/shared/FinCEN-BOI-Notice-Deadline-Extension-508FINAL.pdf.
[3] Id.
