Beneficial ownership reporting under the Corporate Transparency Act (CTA) is back on — for now — with most companies facing a rapidly approaching March 21 deadline. But compliance professionals and business owners who’d hoped for a degree of finality may be disappointed, as FinCEN, the Treasury Department agency charged with gathering beneficial ownership information (BOI) reports under the CTA, says it may further extend the deadline and, injecting even more uncertainty, will begin a process to revise its rules later this year.
Reinstatement of CTA reporting followed a Feb. 18 decision by the US District Court for the Eastern District of Texas, which granted the Treasury Department’s request to stay its own Jan. 7 order that had halted CTA enforcement nationwide. FinCEN later issued a formal notice restarting the clock on BOI reporting compliance, extending the deadline to March 21 for most covered entities.
However, further delays to the deadline seem likely, with FinCEN indicating it may shift the March 21 deadline, as it prioritizes reporting for entities that “pose the most significant national security risks.”
“Last year, there was a 90-day period in which to make updates to your CTA reports, and the regulation rolled back to 30 days for 2025,” said Jamie A. Schafer, a partner in Perkins Coie’s Washington DC office. “My strong suspicion is they will extend that to 90 days again or even further and give entities, when changes occur, more time to update their prior reports. Whether this March 21st deadline will stick? That’s anybody’s guess; obviously, we’re tea leaf-reading.”
That said, as of now, millions of companies are facing a deadline that’s less than four weeks away.
“The reinstatement of beneficial ownership information reporting requirements with a March 21 deadline creates a tight timeline for millions of businesses across the US,” said Rupak Venugopal, vice president of beneficial ownership at Wolters Kluwer Financial & Corporate Compliance. “We understand this quick turnaround is challenging for many organizations, especially smaller companies balancing numerous responsibilities.”
Small reporting entities appear to be on the agency’s mind, as it also revealed plans to revisit the rule later this year, pointing to the potential burden on small businesses: “FinCEN also intends to initiate a process this year to revise the BOI reporting rule to reduce burden for lower-risk entities, including many U.S. small businesses.”
Small businesses aren’t the only ones that may not be ready to file, Schafer said.
“I think there will be mass noncompliance among smaller entities and emerging companies,” she said. “All the big players have sturdy legal departments who have recognized this, but we’re getting new inquiries every day from smaller businesses, emerging companies, fintechs, those that don’t have in-house legal counsel and may not have even noticed this until [seeing] some press.”
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The Corporate Transparency Act has faced a winding road to implementation since it became law. Passed by Congress in late 2020 as part of the National Defense Authorization Act, the legislation was enacted over a veto by then-President Donald Trump, whose return to the White House in 2025 could inject a degree of chaos into the future of CTA reporting. Early Trump 2.0 actions have caused widespread uncertainty in FCPA enforcement and corporate DEI initiatives, and his deregulation-through-downsizing has affected agencies like the Consumer Financial Protection Bureau and the Equal Employment Opportunity Commission.
The Trump Administration’s continued defense of the CTA in the Texas cases could portend that the law is safe from the kinds of shakeups much of the rest of government has seen, Schafer said, but it’s conceivable that could change.
“You could see the president or others at high levels of the administration reaching down and saying we think we should change tack on that, we don’t think we should defend the CTA, we think we should roll it back,” she said.
But Schafer does agree the CTA is not beyond reproach. For example, companies that may be missing required information given that when they were formed, it was not required, currently, lack clarity in FinCEN’s rules about how they should address that missing information.
What should companies do now?
All observers encourage company owners and senior leaders to remain abreast of any developments — and be ready to file.
“The first step is to make sure that you fully understand the scope of the rule,” Schafer said. “Evaluate whether any exemptions apply. The exemptions are in many ways narrow, but there are 23 of them. And then assuming you are not exempt, evaluate who are your beneficial owners, because that is an issue of great ambiguity for some.”
Establishing sound CTA compliance processes can be a help here, she said.
“Given the criminal and civil potential penalties here, it’s a really good idea to have a policy, a guideline that you’re actually following, because the best protection for any company as to second-guessing by FinCEN down the road as to who they reported is going to be that you worked on a principled basis,” Schafer said. “You made a good faith, legal analysis and, whether they agree with that or not, you applied it in a principled way.”
