In a major development for U.S. businesses, the Financial Crimes Enforcement Network (FinCEN) has announced the reinstatement of the beneficial ownership information (BOI) reporting mandate under the Corporate Transparency Act (CTA). The decision comes on the heels of a February 18, 2025, ruling by the U.S. District Court for the Eastern District of Texas, which lifted a preliminary injunction in the case of Smith, et al. v. U.S. Department of the Treasury, et al. (Case No. 6:24-cv-00336). With this ruling, the filing requirement is back in effect, and a new deadline of March 21, 2025, has been set for most reporting companies.

This announcement, detailed in FinCEN Notice FIN-2025-CTA1, marks a significant shift after months of legal uncertainty surrounding the CTA’s BOI requirements. The reinstated mandate requires millions of U.S. entities—particularly small businesses and corporations formed before January 1, 2024—to file initial, updated, or corrected BOI reports by the new deadline. For entities formed in 2025, the filing deadline is the later of March 21, 2025, or 30 days from their date of formation.

Why the Extension?

Recognizing the challenges businesses may face in meeting these obligations, FinCEN has extended the deadline by 30 days from February 19, 2025, to give companies additional time to comply. According to the agency, this grace period reflects the Department of the Treasury’s commitment to balancing national security priorities with the regulatory burden on businesses. During the next 30 days, FinCEN plans to evaluate options for further adjusting deadlines, with a focus on prioritizing reporting from entities posing the greatest national security risks.

Plans to Ease the Burden

In a promising move for small businesses, FinCEN also revealed plans to revise the BOI reporting rule later this year. The goal? To reduce the compliance burden for lower-risk entities, including many U.S. small businesses that have voiced concerns about the complexity and cost of the reporting requirements. Details of these revisions remain forthcoming, but the agency has signaled its intent to streamline the process while maintaining robust oversight of higher-risk entities.

Who Needs to File—and When?

Here’s a breakdown of the updated deadlines:

• Most Reporting Companies: Entities formed prior to January 1, 2024, must file their initial, updated, or corrected BOI reports by March 21, 2025.

• New Entities in 2025: Companies formed this year must file by the later of March 21, 2025, or 30 days from their formation date.

• Exceptions: Companies with existing deadlines beyond March 21, 2025—such as those qualifying for disaster relief extensions—must adhere to their later deadlines. Additionally, plaintiffs in National Small Business United v. Yellen (including Isaac Winkles, related reporting companies, and National Small Business Association members as of March 1, 2024) are currently exempt from filing.

What’s Next?

FinCEN has promised to provide updates before March 21, 2025, if further modifications to the deadline are deemed necessary. In the meantime, businesses are urged to review their obligations and prepare to submit their BOI reports through FinCEN’s online portal. Additional guidance is available on the agency’s website at www.fincen.gov

The Bigger Picture

The reinstatement of the BOI mandate underscores the U.S. government’s ongoing efforts to combat money laundering, terrorism financing, and other illicit activities by increasing transparency in corporate ownership. However, the rule has faced pushback from business groups and legal challenges, as evidenced by the Smith case, highlighting the tension between regulatory oversight and administrative feasibility.

Stay tuned for more updates as FinCEN refines its approach to this landmark regulation. For now, the clock is ticking toward March 21, 2025—mark your calendars!

(This is Blog Post #1695)