Mark L. Brasee
402.978.5306mbrasee@fraserstryker.com email Mark
The Financial Crimes Enforcement Network (“FinCEN”) explained in its latest guidance that the beneficial ownership information (“BOI”) requirement under the Corporate Transparency Act (“CTA”) extends to reporting companies that have been dissolved or otherwise ceased to exist after January 1, 2024. The new guidance is effective immediately.
The BOI requirement under the CTA, effective January 1, 2024, mandates that each reporting company report to FinCEN which individuals own or control the company. A reporting company registered or created before January 1, 2024, is required to file its BOI report by January 1, 2025. A reporting company registered or created after January 1, 2024, must file its BOI report within ninety (90) calendar days. Reporting companies registered or created in 2025 and beyond will only have thirty (30) calendar days to file their BOI report. See Fraser Stryker’s previous article, The Corporate Transparency Act: What to Know and What to Do, for more information on basic CTA reporting requirements.
FinCEN issued new guidance regarding the BOI requirement on July 8, 2024. FinCEN clarifies that any non-exempt reporting company not “formally and irrevocably” dissolved before January 1, 2024, must file a BOI report before the applicable deadline. The guidance provides that typically, a reporting company is “formally and irrevocably” dissolved upon “filing dissolution paperwork with its jurisdiction of creation or registration, receiving written confirmation of dissolution, paying related taxes or fees, ceasing to conduct any business, and winding up its affairs.” FinCEN has advised that reporting companies that have been “administratively dissolved or suspended” likely still must file a BOI report because they do not necessarily cease to exist as a legal entity unless the dissolution or suspension has become permanent.
This new guidance significantly expands the BOI requirement. It now covers:
- Reporting companies formed prior to January 1, 2024, and not “formally and irrevocably” dissolved until after January 1, 2024;
- Reporting companies formed after January 1, 2024, even if dissolved prior to the reporting deadline; and
- Reporting companies dissolved prior to January 1, 2024, if the dissolution is not irrevocable.
FinCEN’s new guidance leaves dissolved and dissolving reporting companies with many questions unanswered. The guidance fails to specify who is required to make the BOI filing, who is liable if a dissolved company fails to file, and at what point during the dissolution a reporting company must ascertain its beneficial owners.
Fraser Stryker continues to monitor FinCEN for future guidance regarding the CTA. We are available to assist businesses, and their owners, in navigating the changing landscape of this new federal law.
This article has been prepared for general information purposes and (1) does not create or constitute an attorney-client relationship, (2) is not intended as a solicitation, (3) is not intended to convey or constitute legal advice, and (4) is not a substitute for obtaining legal advice from a qualified attorney. Always seek professional counsel prior to taking action.