We wanted to provide an important update regarding the Corporate Transparency Act (CTA) and its Beneficial Ownership Information (BOI) Reporting Rule.
On February 17, 2025, the U.S. District Court for the Eastern District of Texas stayed the nationwide injunction that had halted enforcement of the BOI reporting requirement. This follows a U.S. Supreme Court ruling on January 23, 2025, in Texas Top Cop Shop v. McHenry, which stayed a prior injunction pending appeal in the Fifth Circuit. Oral arguments in that case are scheduled for March 25, 2025.
As a result, FinCEN has announced that reporting companies are once again required to file BOI reports. For most reporting companies, the deadline to submit initial, updated, or corrected BOI reports is March 21, 2025.
Several other legal challenges to the CTA are ongoing, and legislative efforts to amend or repeal the Act are also in progress. Notably, the Repealing Big Brother Overreach Act has been reintroduced, and the House recently passed the Protect Small Businesses from Excessive Paperwork Act of 2025, which could extend the BOI reporting deadline to January 1, 2026, if enacted.
Who Needs to File?
The objective of the CTA is to obtain and understand who the legal owner is down to the individual who controls the company to prevent money laundering, tax evasions & illegal activity. Entities that need to file are LPs, LLCs (including single member LLCs), and Corporations. The beneficial owner is the person who directly or indirectly exercises “substantial control” and/or owns or controls 25% or more of the entity. Directors (of Corporations), Managers (of LLCs), General Partners (of Limited Partnerships), etc. are required to file as well.
If you’re unsure how to proceed, we can handle your filing for you. Simply contact our office at 760-448-2220 or [email protected] and we will be happy to assist you.
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