BACKGROUND
The federal Corporate Transparency Act (CTA) went into effect on January 1, 2024, and is intended to prevent certain financial crimes, such as money laundering and tax fraud. Under the CTA, entities that qualify as “reporting companies” are required to report certain information about their “beneficial owners” (referred to as beneficial ownership information, or “BOI” for short) to the Financial Crimes Enforcement Network (FinCEN), a bureau of the United States Department of the Treasury. Dissolved entities can be subject to the reporting requirements of the CTA. Whether a dissolved entity is subject depends on when the entity completed the process of formally and irrevocably dissolving.

REPORTING FOR DISSOLVED ENTITIES
Though it may vary from state to state, in general, to complete the dissolution process, an entity must accomplish the following steps:
1.  File dissolution paperwork with its jurisdiction of formation;
2.  Receive written confirmation of dissolution;
3.  Pay related taxes or fees;
4.  Cease to conduct any business; and
5.  Wind up its affairs (e.g., fully liquidate and close all bank accounts).

An entity that has completed the dissolution process before January 1, 2024 is not subject to the reporting requirements of the CTA. However, an entity that only completed part of the process before January 1, 2024 is subject to the reporting requirements.

For example, an entity that has completed steps 1 through 4 but not satisfied all of its liabilities and distributed all of its assets has not finished the winding up process (step 5). Thus, assuming step 5 is not completed before January 1, 2024 and an exemption to filing isn’t available, such entity would  be subject to the reporting requirements of the CTA and would be required to file a BOI report by January 1, 2025 (the deadline by which entities formed before January 1, 2024 must file their reports).

An entity formed on or after January 1, 2024, but before January 1, 2025, must file a BOI report with FinCEN within 90 calendar days of formation, even if the entity completed the dissolution process prior to its reporting deadline.

NEXT STEPS
The attorneys at Dvorak Law Group are closely monitoring guidance from FinCEN regarding the CTA, and they are ready to advise you on the latest developments and how your business may be impacted. If you would like assistance in reviewing whether you need to file a BOI report, the attorneys at Dvorak Law Group are prepared to assist you in reviewing the reporting requirements and in completing and filing a BOI report.

 

David Mayer

Office: 402.933.9419

dmayer@ddlawgroup.com

 

Seth Moen

Seth Moen

Office: 402.933.3079

smoen@ddlawgroup.com