UPDATE: On March 21, 2025, the Financial Crimes Enforcement Network issued an Interim Final Rule removing Beneficial Ownership Information Reporting requirements for U.S. companies and U.S. individuals under the Corporate Transparency Act. For more details, please view our latest alert here.
On February 17, 2025, the Federal District Court in the Eastern District of Texas, Tyler Division, granted a stay reversing the nationwide preliminary injunction which had temporarily halted enforcement of the Corporate Transparency Act (the “Act”), pending the government’s appeal to the Fifth Circuit in Smith v. Dep’t of the Treasury, E.D. Tex., No. 6:24-cv-00336, 1/8/25. This was the last remaining nationwide injunction halting enforcement of the Act and, now that the stay has been granted, the Act’s reporting requirements are back in effect.
The February 17, 2025 Order staying the injunction came after the Department of Justice filed a motion to stay the injunction with the Eastern District of Texas in light of the stay ordered by the U.S. Supreme Court in Texas Top Cop Shop, Inc., et al. v. McHenry, et al., No. 4:24-cv-00478 (E.D. Tex.) (formerly Texas Top Cop Shop, Inc., et al. v. Garland, et al.). This stay ordered by the U.S. Supreme Court was covered in our recent Alert.
On February 19, 2025, the Department of Treasury’s Financial Crimes Enforcement Network (“FinCEN”) responded to this ruling by extending the deadline for existing Reporting Companies to March 21, 2025. The filing deadline for new Reporting Companies remains 30 days from the date of formation. Certain Reporting Companies qualifying for disaster relief may still qualify for an extended deadline, as further detailed by FinCEN on its website. FinCEN has also stated that it will provide updates “of any further modification of this deadline, recognizing that reporting companies may need additional time to comply with their BOI reporting obligations once this update is provided.” Further, FinCEN stated it “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.”
This situation continues to evolve on multiple fronts and parties should expect further developments. The Fifth Circuit is scheduled to hear oral arguments on April 1, 2025, in Texas Top Cop Shop. Additionally, the U.S. House of Representatives voted 408-0 on February 10, 2025 in favor of pushing the Act’s reporting deadline to January 1, 2026. This measure is now pending in the U.S. Senate. For the time being, the Act’s requirements are back in effect and Reporting Companies are required to make filings by the relevant deadlines in order to remain compliant.
Barley Snyder will continue to follow the Act and all relevant legislative developments closely and provide timely updates as new information is released. If you have any questions regarding this decision or the Act generally, please contact Dan Desmond, Charmaine Nyman, Caitlin Long, or any member of Barley Snyder’s Business Practice Group. You may also visit our Corporate Transparency Act Response Team webpage for more information and previous alerts on this matter.
