The Corporate Transparency Act (CTA) reporting regime is back on as of February 20, 2025. The CTA is a U.S. law that requires certain companies to report their beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN) to enhance transparency and combat financial crimes like money laundering. While the enforcement of the CTA faced legal challenges, including a nationwide preliminary injunction in December 2024 that temporarily halted it, the most recent development has reinstated the reporting requirements.

Specifically, the U.S. District Court for the Eastern District of Texas granted a stay on the previous injunction, making the CTA’s reporting obligations mandatory once again. Here’s what this means for businesses:

• Who Must Comply: Most small and medium-sized businesses formed as corporations, LLCs, or similar entities are required to file Beneficial Ownership Information (BOI) reports with FinCEN.
• Deadlines:
• Companies formed before January 1, 2024, must submit their initial BOI reports by March 21, 2025.
• Companies formed on or after January 1, 2024, have 90 days from their creation date to file.
• Penalties: Failure to comply with these reporting requirements could lead to civil or criminal penalties.

Businesses should take immediate steps to understand their obligations under the CTA, as the reporting regime is now active. However, it’s worth noting that ongoing legal challenges could potentially affect its status in the future, so staying updated on any new developments is advisable. For now, the CTA reporting requirements are in full effect.