Nonexistent Entities Must Still File a BOI Report

The Corporate Transparency Act (or CTA) is a new law with significant consequences for small business owners across the country. Because the law is unique, FinCEN has had to release additional guidance on several occasions. And on July 8, FinCEN issued new guidance for entities that cease to exist.

The guidance states that any nonexempt reporting company that ceases to exist on or after January 1, 2024, must file a BOI report with FinCEN. This is so, even if the reporting company was dissolved before the CTA’s reporting deadlines.

Three Scenarios When Entities Must File a BOI Report

FinCEN listed three following scenarios that require a company to submit a BOI report:

        1.) Nonexempt reporting companies that began winding up affairs in 2023 but did not complete the process of “formally and irrevocably” dissolving until after January 1, 2024.

        2.) Nonexempt reporting companies that are created or registered in 2024, and cease to exist as a legal entity within 90 days after receiving notice of its creation.

        3.) Nonexempt reporting companies that are created or registered in 2025, and cease to exist as a legal entity within 30 days after receiving notice of its creation.

However, if the entity completed its dissolution process before January 1, 2024, it does not need to submit a BOI report.

What About Mergers and Acquisitions?

FinCEN will also require entities involved in mergers and acquisitions to submit BOI reports to FinCEN. If an entity is created to facilitate a merger, and that entity is later merged out of existence, it will still need to file a BOI report.

What is the Timing to Report this Information?

The same general reporting deadlines still apply to entities that cease to exist.

• • If the company was formed before January 1^st, 2024, it has one year (or until December 31^st, 2024) to report your information to FinCEN.
•  
• • If the company was formed between January 1^st, 2024 and December 31^st, 2024, it has 90 days to report your information to FinCEN.
•  
• • If the company was formed after January 1^st, 2025, it only has 30 days to report its information to FinCEN.
•  
• • When the company has a change in ownership, a new mailing address, or someone discovers an error in a previous report, it only 30 days to file the corrected reports.

To avoid these deadlines, it is best practice for the nonexempt reporting companies to file their reports right before the dissolution process begins. This will help ensure that the information reported to FinCEN is accurate. After the nonexempt reporting company files its initial BOI report, no additional report needs to be filed with FinCEN.

Need Help Submitting These Reports?

If you need help submitting these BOI reports, we here at Corporate Direct can report this information for you. For more information on the CTA and its reporting requirements, you can schedule a free 15-minute consultation with one of our incorporating specialists by clicking the link here: https://corporatedirect.com/schedule/