The Financial Crimes Enforcement Network (FinCEN) has updated its FAQs section on beneficial ownership information (BOI) to address inquiries about entities that are no longer active and historical beneficial owners of a reporting company. Find the newly added FAQs below:
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. Reporting companies created or registered in 2024, no matter how quickly they cease to exist thereafter, must report their beneficial ownership information to FinCEN within 90 days of receiving actual or public notice of creation or registration. Reporting companies created or registered in 2025 or later, no matter how quickly they cease to exist thereafter, must report their beneficial ownership information to FinCEN within 30 days of receiving actual or public notice of creation or registration. 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 the expiration of the 30- or 90-day period reporting companies have to report their beneficial ownership information to FinCEN. If a reporting company files an initial beneficial ownership information report and then ceases to exist before the expiration of the 30- or 90-day period reporting companies have to report their beneficial ownership information to FinCEN, then there is no requirement for the reporting company to file an additional report with FinCEN noting that the company has ceased to exist.
[Updated September 10, 2024]
Who may file a BOI report on behalf of a reporting company created or registered in 2024 or later that ceases to exist before its initial BOI report is due to FinCEN?
Anyone whom a reporting company authorizes to act on its behalf—such as an employee, owner, or third-party service provider—may file a BOI report on the reporting company’s behalf, even after the reporting company ceases to exist (see Question B.8). Thus, if a reporting company will cease to exist before the expiration of the 30- or 90-day period reporting companies have to report their beneficial ownership information to FinCEN, then it should make arrangements while it exists to have the report submitted on its behalf, even if the requisite filing does not occur until after the reporting company ceases to exist. Regardless, the BOI report must be filed by the time such report is due to FinCEN.
[Updated September 10, 2024]
Is a foreign company required to report its beneficial ownership information to FinCEN if the company stopped doing business in the United States before reporting requirements went into effect on January 1, 2024?
A foreign company is not required to report its beneficial ownership information to FinCEN if it ceased to be registered to do business in the United States before January 1, 2024. For purposes of complying with beneficial ownership information reporting requirements under the CTA, a foreign reporting company ceases to be registered to do business in the United States when it entirely completes the process of formally and irrevocably withdrawing its registration(s) to do business in the United States. A foreign company that entirely withdrew any and all registrations to do business in the United States before the beneficial ownership information reporting requirements became effective January 1, 2024, was never subject to the reporting requirements and thus is not required to report its beneficial ownership information to FinCEN.
Although state or Tribal law may vary, a foreign company typically completes the process of formally and irrevocably withdrawing its registration to do business in a jurisdiction by, for example, filing withdrawal paperwork with its jurisdiction of registration, receiving written confirmation of withdrawal, paying related taxes or fees, ceasing to conduct any business in the jurisdiction, and winding up its affairs in that jurisdiction.
If a foreign reporting company (see Question C.1) was registered to do business in the United States on or after January 1, 2024 for any period of time (i.e., the company did not entirely complete the process of withdrawing its registration 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.
Similarly, if a foreign reporting company was registered to do business in the United States on or after January 1, 2024, for any period of time, and subsequently withdrew that registration, then the company is required to report its beneficial ownership information to FinCEN—even if it withdrew the registration before the expiration of the 30- or 90-day period reporting companies have to report their beneficial ownership information to FinCEN.
For specifics on how to determine when a company withdraws its registration to do business, consult the law of the jurisdiction in which the company was registered. A company that is administratively suspended from conducting business—because, for example, it failed to pay a filing fee or comply with certain jurisdictional requirements—generally does not cease to be registered to conduct business unless the suspension becomes permanent.
[Updated September 10, 2024]
Should an initial BOI report include historical beneficial owners of a reporting company, or only beneficial owners as of the time of filing?
Except as noted below, an initial BOI report should only include the beneficial owners as of the time of the filing. Reporting companies should notify FinCEN of changes to beneficial owners and related BOI through updated reports.
If a reporting company created or registered in 2024 or later ceases to exist before the expiration of the 30- or 90-day period reporting companies have to report their beneficial ownership information to FinCEN, but no one submits the reporting company’s initial beneficial ownership information report to FinCEN until after the reporting company ceases to exist, then that beneficial ownership information report should reflect the beneficial ownership information accurate as of the moment prior to the reporting company ceasing to exist.
More information on BOI Reporting requirements:
Parasec has put together a Frequently Asked Questions (FAQs) section to assist our clients in complying with the new Federal requirements. We have also prepared an informational sheet to help reporting companies determine who qualifies as a beneficial owner (you can find it here). Additionally, you can access our BOI Filings Prep Checklist here. It’s essential to gather the necessary documents for your BOI filing(s) before getting started to streamline the process. You can use our BOI filing prep checklist to prepare for this new compliance requirement. If you’re ready to submit your BOI report, our team is available to help. You can reach our BOI report specialists directly at BOI@parasec.com.