News & Events

news & events / 02.18.25 /Kenneth R. Jacobs

CTA Update: House Passes One-Year Delay Bill; FinCEN Appeals “Smith” Decision Barring Enforcement

On Monday, February 10^th, the House unanimously passed the “Protect Small Businesses from Excessive Paperwork Act of 2025.” The bill includes a one-year delay in compliance with the CTA’s filing requirements for businesses formed before January 1, 2024.

In the meantime, FinCEN has filed a Notice of Appeal of the Smith case (which had imposed a nationwide injunction against enforcement of the Beneficial Ownership filing requirements of the CTA), and requested a “stay” of the injunction. Imposition of a stay by the Appeals Court would effectively undo the injunction and force companies to file their Beneficial Ownership Information Reports with FinCEN. However, FinCEN stated that if the stay was granted, FinCEN would allow at least 30 days for businesses to comply.

If the appeal follows the same path as the other case, the 5^th Circuit appeals court will deny the stay, the government will appeal, and the Supreme Court will grant the stay pending a decision by the justices. Notwithstanding the Supreme Court’s position (already striking a nationwide injunction that barred enforcement of the CTA), the political momentum appears to be shifting against the more onerous requirements of the Act. We would not be surprised if the Senate passed the House bill by a similar margin and the President signed it into law.