Legal Challenges Delay Corporate Transparency Act Compliance Deadline

Ongoing legal disputes over the Corporate Transparency Act (CTA) have postponed the deadline for small businesses to report beneficial ownership information (BOI) to the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN). Originally scheduled for January 13, 2025, the compliance requirement remains in limbo following a December 27 ruling by the Fifth Circuit Court of Appeals.

On December 31, the U.S. Solicitor General took steps to overturn a nationwide injunction issued earlier by a Texas court. Although the government successfully secured a stay on the injunction, the matter remains unresolved, adding further complexity to the situation.

The Solicitor General’s application to the Supreme Court seeks to narrow the injunction’s scope to apply only to the plaintiffs and members of the National Federation of Independent Business or to have the injunction stayed altogether pending an appeal. Additionally, the filing suggests treating the application as a petition for a writ of certiorari, a move designed to expedite the Supreme Court’s review process.

While the Supreme Court’s intervention remains uncertain, the next pivotal development is a March 25 hearing, where the Fifth Circuit will assess the injunction’s merits. In the meantime, BOI filings remain voluntary, leaving businesses in a state of uncertainty.

Trade groups such as SEMA have expressed approval of the delay, yet they continue to advocate extending the compliance deadline to December 31, 2025. These organizations argue that businesses need more time to adapt to the requirements imposed by the CTA.

Under the CTA, businesses are required to disclose information about individuals who either own or control at least 25% of a company or have substantial control over its operations. This legislation is part of a broader effort to combat financial crimes by promoting corporate transparency.

The ongoing legal proceedings have highlighted significant concerns and challenges related to implementing the CTA. Businesses and trade groups alike are closely monitoring the situation as they await further clarity on the law’s enforcement timeline.

By fLEXI tEAM