FinCEN Updates BOI Reporting Requirements for Dissolved Entities
Staying informed about regulatory updates is crucial for any business, especially when it comes to BOI reporting. On July 8, 2024, FinCEN added a few new FAQs (C.12 – C.14) to provide more clarity on BOI reporting requirements for the dissolved entities. According to this update, certain dissolved entities are required to complete BOI reporting with the FinCEN.
Key Updates in the FAQs
Reporting Requirements for Dissolved Entities
The updated FAQs provide clarity on the obligations of companies that ceased to exist before and after January 1, 2024.
Entities Dissolved Before January 1, 2024
Companies that completed their formal and irrevocable dissolution before January 1, 2024, are not required to report BOI to FinCEN. This means they must have filed dissolution paperwork, received written confirmation of dissolution, paid related taxes or fees, ceased conducting business, and fully wound up their affairs.
Entities in Existence After January 1, 2024
If a company continues to exist in any legal capacity after January 1, 2024 (without completing the entire process of formally and irrevocably dissolving), it is required to report its BOI to FinCEN, even if it had ceased conducting business before this date.
Entities Formed and Dissolved After January 1, 2024
The companies created or registered in 2024 must complete their BOI filing within 90 days of receiving notice of creation or registration even if they ceases to exist before the initial BOI report is due. For companies that register on or after January 1, 2025, this deadline would be 30 days.
Once a company files its initial BOI report and subsequently ceases to exist, there is no requirement to file an additional report indicating the company has ceased to exist.
Reporting Requirements for Companies Created Before January 1, 2021
In addition to the update regarding dissolved entities, FinCEN has also added an FAQ about companies created before the Corporate Transparency Act was enacted.
The FAQ confirms that BOI reporting requirements apply to all companies qualifying as ‘reporting companies’ regardless of their creation or registration date, except those that ceased to exist before January 1, 2024.
Implications for Businesses
These updates from FinCEN underscore the importance of understanding BOI reporting obligations, particularly for companies undergoing dissolution. Businesses must take the following steps to ensure compliance:
Review Dissolution Procedures
Companies planning to dissolve should incorporate BOI reporting into their dissolution procedures to avoid penalties.
Update Compliance Policies
Businesses should update their compliance policies to reflect the new BOI reporting requirements and ensure all relevant personnel are informed and trained accordingly.
Consult Legal and Compliance Experts
Engaging with legal and compliance experts can help businesses navigate these regulations and ensure they remain compliant.
TaxBandits Offers a Simple Solution to Meet BOI Reporting Requirements
Companies that are looking to simplify their BOI reporting can get started with TaxBandits!
TaxBandits supports all types of BOI reports – Initial, Correction, Update and New Exempt Entity reports. Our user-friendly software, blended with time-saving features, offers a streamlined platform for businesses to prepare and submit their BOI reports.
For CPAs and tax professionals who handle BOI reporting for their clients, TaxBandits provides comprehensive client management (BanditConnect) and team management tools (BanditCollab), enabling seamless collaboration and maximum efficiency.
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