FinCEN Clarifies CTA Reporting Requirements for Businesses Terminated in 2024

For those that haven’t heard, a new federal law went “live” on January 1, 2024, which imposed new reporting requirements for business owners.  Basically, any business entity (subject to certain exceptions) must report its owners, operators, and organizers to the Department of Treasury Financial Crimes Enforcement Network (“FinCEN”).  The report is called a Beneficial Ownership Information (“BOI”) report.  To learn more about the Corporate Transparency Act (“CTA”), please check out our previous blog.

All companies formed prior to 2024 have until the end of the year to complete their BOI report, and any new entity formed in 2024 must complete its BOI report within 90 days of formation.  What was not clear, though, is what happens if the business is terminated in 2024.

On July 8, 2024, FinCEN updated its Frequently Asked Questions to clarify that if the entity existed for any period of time in 2024, then it must file the BOI report.  So, even if the business wound up its affairs prior to December 31, 2023, but if the final dissolution paperwork was not processed until after January 1, 2024, then a BOI report is still required.

Similarly, FinCEN further clarified that if a company is formed after January 1, 2024, and even if it ceases to conduct business and completes its full windup and dissolution process before its 90-day filing deadline, it still must file a BOI report.

Please feel free to reach out to see whether or not your business needs to comply with the new filing requirements.