We are sending this communication to provide you with a time-sensitive update of the latest legal and legislative developments regarding the Beneficial Ownership Information (BOI) reporting requirements under the Corporate Transparency Act (CTA).

Overview of Latest Developments

On Tuesday, February 18, 2025,the U.S. District Court for the Eastern District of Texas lifted the nationwide injunction in the Smith, et al. v. U.S. Department of The Treasury, et al. case and the beneficial ownership information reporting requirements under the Corporate Transparency Act are once again in effect for most reporting companies.

Financial Crimes Enforcement Network (FinCEN) updated its alert (“Alert”) on February 19, 2025, acknowledging that in light of the District Court’s decision, reporting companies, except those specifically named in the Alert, are once again required to file beneficial ownership information with FinCEN. The Department of the Treasury acknowledged that reporting companies may need additional time to comply with their BOI reporting obligations, and accordingly extended the reporting deadline 30 calendar days from February 19, 2025, for most companies as follows:

• • For the vast majority of reporting companies, the new deadline to file an initial, updated, and/or corrected BOI report is now March 21, 2025. FinCEN will provide an update before then of any further modification of this deadline, recognizing that reporting companies may need additional time to comply with their BOI reporting obligations once this update is provided.

• • Reporting companies that qualify for disaster relief may have extended deadlines that fall beyond March 21, 2025. These companies should abide by whichever deadline is later.

• • Plaintiffs in National Small Business United v. Yellen, No. 5:22-cv-01448 (N.D. Ala.) — namely, Isaac Winkles, reporting companies for which Isaac Winkles is the beneficial owner or applicant, the National Small Business Association, and members of the National Small Business Association (as of March 1, 2024) — are not currently required to report their beneficial ownership information to FinCEN at this time.

Further, FinCEN has stated that over the next 30-day period, it will assess its options to further modify deadlines or reporting requirements for lower-risk entities, including many U.S. small businesses, while prioritizing reporting for those entities that pose the most significant national security risks.

In addition, we do want you to be aware of recent legislative development as efforts continue to seek a delay of the reporting deadline and on February 10, 2025, the House unanimously passed the Protect Small Businesses From Excessive Paperwork Act of 2025 (H.R. 736), which would delay the beneficial ownership information mandatory reporting requirement due date to January 1, 2026, for entities formed prior to January 1, 2024. The bill has now been sent to the Senate.

Next Steps

We strongly encourage any entity deemed a reporting company under the CTA to timely file their BOI reporting by the extended filing deadlines stated above.

Due to ambiguity as it relates to providing professional services for this BOI filing and it being interpreted by some as a potential unauthorized practice of law, including but not limited to state lawmakers and insurance carriers, AHP cannot assist clients with this filing nor advise clients on this topic.

If you have any questions regarding the legal implications of these recent court or legislative proceedings or need a legal determination as to whether an exemption applies to your entity or whether legal relationships constitute beneficial ownership, we strongly encourage you to consult legal counsel with expertise in this area to assist your organization.

Note that penalties for willfully violating the CTA’s reporting requirements include (1) civil penalties of up to $606 per day that a violation is not remedied, (2) a criminal fine of up to $10,000, and/or (3) imprisonment of up to two years.

 

For additional information regarding the beneficial ownership reporting requirements under the CTA, refer to FinCEN’s Frequently Asked Questions document at https://www.fincen.gov/boi-faqs or to the FinCEN Reference Materials at  https://www.fincen.gov/boi/Reference-materials for detailed information and updated guidance regarding any further deadline changes that may be promulgated.)