Dissolved But Not Forgotten: CTA Compliance for Companies Dissolved After January 2024

By: James M. Black II, Esq., Elysse Anderson, and Jennifer B. Cytryn, Esq.

The Corporate Transparency Act (“CTA”) was signed by Congress back in January of 2021, but the Beneficial Ownership Information Reports (“BOI Reports”) were not required until January 1, 2024. Over the past six months, companies have had to file these BOI Reports to the Financial Crimes Enforcement Network (“FinCEN”) naming the individuals who directly or indirectly own or control a company.[1] Naturally, any companies which wound up or were dissolved prior to January 1, 2024, do not need to file such reports, but what about companies that wind up or dissolve after January 1, 2024?[2] Will the former owners still need to report if the company no longer exists?

In short, yes![3] FinCEN recently answered these questions on their FAQ page.

“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.[4]

“Similarly, 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.”[5]

They also clarified the need for companies to file BOI Reports even when the companies are both registered and wound up or dissolved before the 90 day deadline passes.

“Reporting companies created or registered in 2024 must report their beneficial ownership information to FinCEN within 90 days of receiving actual or public notice of creation or registration.[6] Reporting companies created or registered in 2025 or later must report their beneficial ownership information to FinCEN within 30 days of receiving actual or public notice of creation or registration.[7] These obligations remain applicable to reporting companies that cease to exist as legal entities—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.[8] 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.”[9]

What is the point of making dissolved companies file BOI Reports to FinCEN?

The entire purpose of the CTA is to protect consumers by inhibiting bad actors from hiding or benefitting from fraudulently obtained gains through shell companies or other convoluted ownership structures.[10] By requiring wound up and/or dissolved company owners to still report, FinCEN is limiting a bad actor’s ability to quickly create and dissolve a shell company used to launder or hide money and other assets within the United States.[11]

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DISCLAIMER: This summary is not legal advice and does not create any attorney-client relationship.  This summary does not provide a definitive legal opinion for any factual situation. Before the firm can provide legal advice or opinion to any person or entity, the specific facts at issue must be reviewed by the firm.  Before an attorney-client relationship is formed, the firm must have a signed engagement letter with a client setting forth the Firm’s scope and terms of representation. The information contained herein is based upon the law at the time of publication.

[1] Financial Crimes Enforcement Network, Beneficial Ownership Information, https://www.fincen.gov/boi-faqs.

[2] Lili Martin-Mashburn, FinCEN Alert: Dissolution Before 2025 Won’t Spare CTA Reporting Requirement (July 10, 2024), https://www.jdsupra.com/legalnews/fincen-alert-dissolution-before-2025-5599715/.

[3] Financial Crimes Enforcement Network, supra note 1.

[4] Id.

[5] Id.

[6] Id.

[7] Id.

[8] Id.

[9] Id.

[10] Financial Crimes Enforcement Network, Beneficial Ownership Information Reporting Rule Fact Sheet (Sept. 29, 2022), https://www.fincen.gov/beneficial-ownership-information-reporting-rule-fact-sheet.

[11] Id.