July 2024 Update: FinCEN's New Guidance on Beneficial Ownership Reporting

On July 8, 2024, the Financial Crimes Enforcement Network (FinCEN) issued new guidance concerning compliance with the Corporate Transparency Act (CTA) by revising and elaborating on the Beneficial Ownership Information (BOI) Reporting Frequently Asked Questions (FAQs) that Seyfarth's CTA Task Force has covered in the past. This latest update, consistent with FinCEN's ongoing efforts to provide clear and comprehensive guidance, addresses reporting requirements for companies formed before the enactment of the CTA and clarifies obligations for entities that cease to exist before the reporting deadlines.

The beneficial ownership information (BOI) reporting requirements apply to all companies that qualify as "reporting companies," regardless of when they were created or registered. However, companies that ceased to exist as legal entities before January 1, 2024, are not required to report their beneficial ownership information to FinCEN. For a company to be considered non-existent, it must have formally and irrevocably dissolved, which typically involves filing dissolution paperwork, receiving confirmation of dissolution, paying related taxes or fees, ceasing business operations, and liquidating assets. If an entity continued to exist as a legal entity for any period after January 1, 2024, it must report its beneficial ownership information, even if it had ceased conducting business before this date. Similarly, companies created or registered on or after January 1, 2024 that cease to exist before their initial beneficial ownership information report is due must still submit their report within the specified timeframe. Administrative dissolution or suspension does not equate to ceasing to exist as a legal entity unless it becomes permanent.

For more information on BOI reporting obligations under the Corporate Transparency Act, click here.