U.S. M&A Newsletter — February 24, 2025
CTA is Back On – Filings due March 21st
On February 17, 2025, the U.S. Federal District Court for the Eastern District of Texas issued a stay of the Court’s January 7, 2025, order that had granted relief of enforcement of the Corporate Transparency Act (“CTA”) and its implementing regulation, the beneficial ownership information reporting rule (“BOI Reporting Rule”). The decision effectively reinstates reporting companies’ obligations to file beneficial ownership information reports (“BOIRs”) under the CTA. In responding to the decision and acknowledging the need for additional time to comply with reporting obligations, the Financial Crimes Enforcement Network (“FinCEN”) extended the deadline to comply with the CTA reporting requirements 30 days from February 19, 2025. Reporting companies therefore have until March 21, 2025 to file. FinCEN also noted that during the 30-day extension, FinCEN plans to assess its options to potentially further modify the compliance deadline. In addition, FinCEN further noted that it intends to initiate a process this year to revise the BOI Reporting Rule, aimed at reducing the compliance burden for lower risk entities.
In related news, on February 10, 2025, the U.S. House of Representatives unanimously passed the Protect Small Businesses from Excessive Paperwork Act (H.R. 736). Under the proposed bill, entities that are classified as a “small business concern” would have until January 1, 2026, to submit their BOIRs to FinCEN, instead of the current March 2025 deadline. The bill was introduced in the Senate a day later and awaits further movement. If enacted, this bill could provide small-business owners with much-needed relief and clarity regarding their BOIR filing obligations under the CTA. However, given the time it would take for such a bill to pass and be implemented into law, it may not be enacted before the March filing deadline passes.
Given these recent updates, we advise reporting companies to prepare their due BOIRs for filing by the March 21, 2025, deadline and watch carefully for any updates from FinCEN. Staying informed of future developments and seeking advice will be crucial for navigating any upcoming changes that may arise with regards to enforcement of the CTA.
