Beneficial Owner Reporting Back in Effect

On February 17, 2025, a federal district court in Texas lifted the remaining nationwide injunction that had paused the filing requirements under the Corporate Transparency Act. This injunction had been entered in the case of Smith et al v. United States Department of Treasury, et al (No. 6:2024cv00336-JDK Document 30 (E. D. Tex. 2025)). The Department of Justice of the new administration petitioned the court to lift the injunction, and the court agreed to lift it.

As a result, the requirement to report beneficial owner information is again in effect.

As of the time of this post, the Financial Crimes Enforcement Network (FinCEN) has not yet made an announcement about the reinstatement of the filing requirement, However, it had previously stated that, if a court were to lift the injunction, it intends to extend the reporting deadline for all reporting companies 30 days from the date on which the injunction is lifted. FinCEN had also previously indicated that, during those 30 days, it would assess its options to modify further deadlines or reporting requirements for lower-risk entities, including many U.S. small businesses. FinCEN did not provide any detail about what such further modifications could include.

Any company required to report under the provisions of the law which has not filed the required report should take steps to do so now. While modifications of the requirement by FinCEN and/or the results of continuing litigation could change this requirement, any such change cannot be predicted, so, for now, the filing requirement is back.

Separately, effective on January 17, 2025, the civil penalty for failing to comply with the beneficiary owner reporting requirement increased from $591 a day to $606 a day.