July 2024 Foodman Website and JD Supra
FinCen BOI BOI de FinCEN

On 7/8/24, FinCEN updated its BOI FAQs page to include three new questions and one new update.  FinCEN states that it will continue to provide guidance on how to submit beneficial ownership information; including updating the FinCEN BOI FAQs 7/8/24. FinCEN continues to provide further directive and information via the FinCEN BOI FAQs web page. This is why it is important to keep up and stay informed with the FinCEN BOI FAQs. The FinCEN BOI FAQs 7/8/24 address the topic related to companies that cease to exist or have been dissolved before BOI reporting requirements went into effect on January 1, 2024. In addition, there is an update to Indian Tribe reporting. The last update to FinCEN’s BOI FAQs page was on 6/10/24.

Here are the 3 extracts from the new FinCEN BOI FAQs 7/8/24:

C.12. Do beneficial ownership information reporting requirements apply to companies created or registered before the Corporate Transparency Act was enacted (January 1, 2021)? Yes. Beneficial ownership information reporting requirements apply to all companies that qualify as “reporting companies,” regardless of when they were created or registered. Companies are not required to report beneficial ownership information to FinCEN if they are exempt or ceased to exist as legal entities before January 1, 2024.

C.13. Is a company required to report its beneficial ownership information to   FinCEN if the company ceased to exist before reporting requirements went into effect on January 1, 2024? A company is not required to report its beneficial ownership information to FinCEN if it ceased to exist as a legal entity before January 1, 2024, meaning that it entirely completed the process of formally and irrevocably dissolving. A company that ceased to exist as a legal entity 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 company typically completes the process of formally and irrevocably dissolving by, for example, filing dissolution paperwork with its jurisdiction of creation or registration, receiving written confirmation of dissolution, paying related taxes or fees, ceasing to conduct any business, and winding up its affairs (e.g., fully liquidating itself and closing all bank accounts). If a reporting company continued to exist as a legal entity for any period of time on or after January 1, 2024 (i.e., did not entirely complete the process of formally and irrevocably dissolving 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 reporting company was created or registered on or after January 1, 2024, and subsequently ceased to exist, then it is required to report its beneficial ownership information to FinCEN—even if it ceased to exist before its initial beneficial ownership information report was due. For specifics on how to determine when a company ceases to exist as a legal entity, consult the law of the jurisdiction in which the company was created or registered. A company that is administratively dissolved or suspended—because, for example, it failed to pay a filing fee or comply with certain jurisdictional requirements— generally does not cease to exist as a legal entity unless the dissolution or suspension becomes permanent.

C.14. 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 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 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 their initial beneficial ownership reports are due. If a reporting company files an initial beneficial ownership information report and then ceases to exist, then there is no requirement for the reporting company to file an additional report with FinCEN noting that the company has ceased to exist.

Update to FinCEN BOI FAQs 7/8/24 regarding Indian Tribes:

D.17.  Who should an entity fully or partially owned by an Indian Tribe report as   its beneficial owner(s)? The answer depends in part on the nature of the entity owned by the Indian Tribe. This informs the determination on whether the entity is a reporting company that must report beneficial ownership information. In general, a reporting company must report as beneficial owners all individuals who, directly or indirectly, exercise substantial control over the reporting company and any individuals who directly or indirectly own or control at least 25 percent or more of the reporting company’s ownership interests. An Indian Tribe is not an individual, and thus should not be reported as an entity’s beneficial owner, even if it exercises substantial control over an entity or owns or controls 25 percent or more of the entity’s ownership interests. However, entities in which Tribes have ownership interests may still have to report one or more individuals as beneficial owners in certain circumstances. Entity Is a Tribal Governmental Authority. An entity is not a reporting company—and thus does not need to report beneficial ownership information at all—if it is a “governmental authority,” meaning an entity that is (1) established under the laws of the United States, an Indian Tribe, a State, or a political subdivision of a State, or under an interstate compact between two or more States, and that (2) exercises governmental authority on behalf of the United States or any such Indian Tribe, State, or political subdivision.  This category includes tribally chartered corporations and state-chartered Tribal entities if those corporations or entities exercise governmental authority on a Tribe’s behalf. Entity’s Ownership Interests Are Controlled or Wholly Owned by a Tribal Governmental Authority. A subsidiary of a Tribal governmental authority is likewise exempt from BOI reporting requirements if its ownership interests are entirely controlled or wholly owned by the Tribal governmental authority. Entity Is Partially Owned by a Tribe (and Is Not Exempt). A non-exempt entity partially owned by an Indian Tribe should report as beneficial owners all individuals exercising substantial control over it, including individuals who are exercising substantial control on behalf of an Indian Tribe or its governmental authority. The entity should also report any individuals who directly or indirectly own or control at least 25 percent or more of ownership interests of the reporting company. (However, if any of these individuals owns or controls these ownership interests exclusively through an exempt entity or a combination of exempt entities, then the reporting company may report the name(s) of the exempt entity or entities in lieu of the individual beneficial owner).

Did your company ceased to exist as a legal entity before January 1, 2024?

Do the FinCEN BOI FAQs 7/8/24 provide more clarity regarding your reporting requirements?

Do the FinCEN BOI FAQs 7/8/24 demonstrate that you ought to consider working with a Corporate Governance advisor?

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