By Linda R. Brower, Senior Counsel, Commercial Transactions
The Background
Through a complex mix of decisions by different courts between December 26, 2024 and February 18, 2025, including the U.S. Supreme Court, the mandatory reporting of beneficial ownership information pursuant to The Corporate Transparency Act (Act) is once again enforceable and it comes with a new set of mandatory compliance dates.
As of February 18, 2025, there is no longer any ban on enforcement of the Act (except in one case involving a stay of the Act against only the plaintiffs in that case). Full details of prior court actions involving the Act are available by referencing BMK’s News Alerts on this subject. Here we detail the expedient information business owners need to comply with current legal requirements.
Next Steps
Pursuant to an “Alert” updated February 19, 2025 on the Department of Treasury’s Financial Crimes Enforcement Network (FinCEN)’s website, reporting under the Act’s Beneficial Ownership Information (BOI) Reporting Rule is now subject to the following compliance deadlines:
- Most reporting companies have until March 21, 2025, to file an initial, updated and/or corrected BOI report.
- Reporting companies previously granted an extension to file beyond March 21, by qualifying for hurricane disaster relief for example, must file an initial BOI Report by the later deadline.
- Reporting companies formed or registered on or after February 18, 2025, have thirty (30) from the date of creation or registration to file an initial BOI Report.
Three interesting items to note. FinCEN stated that it will be assessing its options to further modify these deadlines during the 30-day period ending on March 21 “in keeping with [its] commitment to reducing regulatory burdens on businesses” and “prioritizing reporting for those entities that pose the most significant national security risks.” Further, FinCEN stated its intention to “initiate a process” by which it would revise the BOI Reporting Rule to reduce the “burden for lower-risk entities, including many U.S. small businesses.”
Lastly, on February 10, the U.S. House of Representatives passed unanimously the Protect Small Businesses from Excessive Paperwork Act (H.R. 736) with a 408-0 vote. Under that bill, existing entities that are “a small business concern” as defined under 15 U.S.C. §632 and formed or registered before January 1, 2024, would have until January 1, 2026, to submit reports about their beneficial owners to FinCEN. The next day, the Senate introduced a companion bill for consideration by the Senate.
This continues to be a fluid situation. BMK will monitor and report on further developments under the Act as they occur.
This communication is not a full analysis of the matters presented and should not be relied upon as legal advice and could be considered attorney advertising.
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