The US Corporate
Transparency Act's company beneficial ownership reporting obligations are now
back in force, with a new deadline of 21 March 2025.
The Act came into force in early 2024, setting a deadline of 1 January 2025 for pre-existing companies and other businesses to establish their true beneficial ownership and report it to the US Department of the Treasury's Financial Crimes Enforcement Network (FinCEN). Nearly all small businesses are required to file, barring rare cases. New companies were given 90 days from the date of formation to file their initial reports.
Several
challenges were brought to the Act’s constitutional status during 2024. In
December 2024, one of the litigants succeeded in obtaining a court injunction
that prevented the treasury from enforcing the beneficial ownership reporting
provisions. The treasury appealed to the US Supreme Court and on 23 January
2025 got the injunction stayed. However, in the meantime another litigant
obtained a second injunction that once again blocked enforcement of the Act.
The treasury duly challenged the second injunction. On 18 February 2025, the US
Eastern Texas District Court granted its petition, neutralising the second
injunction and opening the way for enforcement of the Act.
The treasury has
confirmed it will now begin enforcing the Act. Reporting is again mandatory,
temporarily at least, and compliance is required to avoid penalties of USD591
per day. However, the treasury is extending the reporting deadline to 21 March
2025 for almost all companies, in recognition that many may need additional
time to comply. New companies will have 30 days after the date of formation to
file their initial reports, considerably shorter than the 90 days provided for companies
formed in 2024. The treasury will provide an update of any further modification
of the new deadline.
In the meantime,
the treasury will 'assess its options to further modify deadlines' for
lower-risk entities 'in keeping with [its] commitment to reducing regulatory
burden on businesses'. It will 'prioritise reporting for those entities that
pose the most significant national security risks, and intends to re-examine
the reporting rule later this year to reduce the reporting burden for small
businesses.
The matter is not yet settled. 'This is likely not the last word on the [Act] and filing deadlines', commented law firm Clark Hill. 'There are pending appeals court cases related to the constitutionality of the [Act] before the Eleventh Circuit and Fifth Circuit.
新聞連結：【2025/2/20 FinCEN】