The Financial Crimes Enforcement Network (FinCEN) recently updated its FAQs on Beneficial Ownership Information (BOI) reporting, specifically regarding companies that have ceased to exist. This is a critical update for businesses that have dissolved or are planning to dissolve.

New FAQ C13, see https://www.fincen.gov/boi-faqs#C_13  –  Is a company required to report its beneficial ownership information to FinCEN if the company ceased to exist before reporting requirements went into effect on January 1, 2024?

No, a company that completely dissolved before January 1, 2024, doesn’t need to report its beneficial ownership information to FinCEN. The reporting requirement only applies to companies that were still legal entities on or after that date.

Here’s a breakdown:

• Dissolved Before January 1, 2024: A company is not required to report its beneficial ownership information to FinCEN if it ceased to exist as a legal entity before January 1, 2024, meaning that it entirely completed the process of formally and irrevocably dissolving. 
• Dissolved After January 1, 2024: If a reporting company continued to exist as a legal entity for any period of time on or after January 1, 2024 (i.e., did not entirely complete the process of formally and irrevocably dissolving before January 1, 2024), then it is required to report its beneficial ownership information to FinCEN, even if the company had wound up its affairs and ceased conducting business before January 1, 2024.
• Created After January 1, 2024: If a reporting company was created or registered on or after January 1, 2024, and subsequently ceased to exist, then it is required to report its beneficial ownership information to FinCEN—even if it ceased to exist before its initial beneficial ownership information report was due.

 

What is “Formal Dissolution”?

The specific steps for dissolving a company can vary by state or tribal jurisdiction. Generally, it involves:

• Filing dissolution paperwork with the state of formation or registration.
• Receiving confirmation of dissolution.
• Paying any outstanding taxes or fees.
• Ceasing all business activity.
• Winding up affairs (liquidating assets and closing accounts).

 

Tip: Check with your state’s business filing office for specific dissolution procedures.

Note: Administrative dissolution (the company failed to pay a filing fee or comply with certain jurisdictional requirements) doesn’t necessarily mean the company ceases to exist as a legal entity, unless the dissolution or suspension becomes permanent. 

In summary, the key thing is whether the company legally ceased to exist before January 1, 2024. If so, you don’t need to report beneficial ownership information.

 

New FAQ C14, see https://www.fincen.gov/boi-faqs#C_14 – If a reporting company created or registered in 2024 or later winds up its affairs and ceases to exist before its initial BOI report is due to FinCEN, is the company still required to submit that initial report?

 

Yes, a reporting company created or registered in 2024 or later must still file its initial Beneficial Ownership Information (BOI) report with FinCEN, even if it dissolves before the report is due.

Here’s the breakdown:

• Filing Deadline: Companies formed in 2024 have 90 days to file their initial BOI report to FinCEN after receiving actual or public notice of creation or registration. Companies formed in 2025 or later have 30 days to file their BOI report to FinCEN after receiving actual or public notice of creation or registration. 
• Dissolution Doesn’t Excuse Filing: This filing requirement applies even if the company ceases to exist as a legal entity—meaning wound up their affairs, ceased conducting business, and entirely completed the process of formally and irrevocably dissolving—before their initial beneficial ownership reports are due.
• No Need for Closure Report: If a reporting company files an initial beneficial ownership information report and then ceases to exist, then there is no requirement for the reporting company to file an additional report with FinCEN noting that the company has ceased to exist.

 

Key Takeaway: The obligation to file the initial BOI report isn’t dependent on the company’s ongoing existence. It’s based on the date of formation. If your company existed for any period of time in 2024 or later, make sure to satisfy the FinCEN requirements or confirm an exemption applies. 

 

Strategy Law – Business Entity Attorneys, San Jose

Navigating complex financial landscapes requires strategic legal guidance. Strategy Law offers expert business entity attorneys in San Jose, dedicated to safeguarding your business interests. From complex financial transactions to disputes, our team provides comprehensive legal solutions tailored to your needs. 

Tamara Pow is the founding partner of Strategy Law. Her practice focuses on the needs of business owners. She has extensive experience with formation and representation of corporations, LLCs, LLPs, general partnerships and limited partnerships. 

This blog is written as of April 2024.  Recommendations and legal requirements are changing rapidly, so please continue to review our legal updates or review postings on relevant government websites. 

All blogs on this site are for educational purposes only, do not constitute legal advice or opinion, and should not be applied to your situation, or any specific situation, without consultation with counsel. Strategy Law, LLP does not provide any legal advice concerning any matter discussed in a blog except upon formal engagement including, without limitation, execution of Strategy Law, LLP’s formal legal services agreement, and with respect to specific factual situations.  No blog constitutes a guaranty, warranty, or prediction regarding the result of any legal matter discussed in the blog or any representation.

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