Corporate Transparency Act Reporting Back in Effect as Texas Injunctions Are Stayed; New York LLC Transparency Act Also in Effect
Over the past three months, the U.S. District Court for the Eastern District of Texas has issued two separate nationwide injunctions against enforcement of the Corporate Transparency Act (the “CTA”), one on December 3, 2024 in Texas Top Cop Shop v. Garland et al. and the other on January 7, 2025 in Smith v. US Department of Treasury. Both cases have been separately appealed by the Government to the Fifth Circuit Court of Appeals. The U.S. Supreme Court stayed the Texas Top Cop Shop injunction on January 23, 2025. Now, the Smith court has stayed its injunction in light of the Supreme Court’s stay in Texas Top Cop Shop.
The stays of the two nationwide injunctions pending appeals mean that beneficial ownership information (“BOI”) reporting under the CTA is once again in effect. The Financial Crimes Enforcement Network (“FinCEN”) issued a public notice yesterday confirming that the CTA is back in effect and extending the deadline for BOI reporting to March 21, 2025.
As a result, with limited exceptions, reporting companies must file their initial BOI reports, or update or correct previously filed reports, by March 21, 2025.
FinCEN indicated that it would seek to “assess whether it is appropriate to modify the CTA’s reporting requirements to alleviate the burden on low-risk entities while prioritizing enforcement to address the most significant risks to U.S. national security.”[1] The Government now aims to reduce the CTA’s scope so as to “reduce burden for lower-risk entities, including many U.S. small businesses.”[2]
Notwithstanding FinCEN’s intentions, the CTA as currently in effect requires that all reporting companies, including U.S. small businesses, complete their BOI reporting by the March 21, 2025 deadline. Reporting companies should immediately begin preparing their BOI reports.
Separately from the CTA, the New York LLC Transparency Act (“NYLLCTA”) became effective on January 1, 2025. It requires limited liability companies formed, or qualified to do business, in New York State to report their beneficial ownership information to the New York Department of State. LLCs formed or qualified to do business in New York before January 1, 2026 must file their reports by January 1, 2027. LLCs formed or qualified to do business after January 1, 2026 must file their reports within thirty days of formation or qualification.
PierFerd will continue observing developments regarding the CTA. For additional information, please contact Ahpaly Coradin at ahpaly.coradin@pierferd.com or your regular PierFerd contact for assistance.
This publication and/or any linked publications herein do not constitute legal, accounting, or other professional advice or opinions on specific facts or matters and, accordingly, the author(s) and PierFerd assume no liability whatsoever in connection with its use. Pursuant to applicable rules of professional conduct, this publication may constitute Attorney Advertising. © 2025 Pierson Ferdinand LLP.
[1] Defendant’s Motion For Stay Pending Appeal, Smith v. US Dept of Treasury, Case No. 6:24-cv-336-JDK, E.D.T.X. (2/5/25).
[2] See Alert at Beneficial Ownership Information Reporting | FinCEN.gov.
