Filing the BOI Report as a Dissolved Entity
Beneficial Ownership Information (BOI) reporting, a requirement put in place by the Corporate Transparency Act (CTA), has strict rules surrounding when it needs to be completed and by whom. While the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) has tried to reduce ambiguity and confusion as much as possible, business owners who both formed and dissolved the same entity in 2024 are in a unique position and may not know if they’re obligated to file. Instead of wading through FinCEN’s web of information, we’ve clarified what business owners of dissolved companies need to know about the BOI Report.
Do companies Started and Closed in 2024 need to file a BOI Report?
According to FinCEN, a business entity that existed for any amount of time after January 1st, 2024 will need to file a BOI Report, regardless of how quickly the entity was dissolved. For example, if you formed an entity to temporarily hold an asset, facilitate a real estate purchase, or simply shut down a business idea rather quickly, there’s a chance you need to file. Any dissolved business entities that formally sunset their operations or otherwise officially shut their doors prior to January 1st of 2024 will not need to file a BOI Report.
Northwest’s BOI Report filing service is a cost-effective way to ensure your entity, dissolved or not, fulfills FinCEN’s guidelines by filing a prompt and accurate report. Our Corporate Guides® are on standby to answer any questions you have.
When is the BOI Report Due?
All reporting companies formed after January 1st, 2024 and before 2025 will need to file the BOI Report and provide information for the beneficial owners of their business, who control or own a substantial stake in the company. For non-exempt companies formed before 2024, they have until January 1st, 2025 to file their BOI Report. For any reporting company formed after January 1st, 2025, this window shrinks to 90 days from the date of formation.
Who is exempt from filing the BOI Report?
FinCEN’s guidelines allow for exactly 23 exemptions to the BOI Report. Exemption from BOI reporting is mostly provided to federal or state authorities and financial institutions like credit unions and banks. FinCEN’s small entity compliance guide provides a checklist to help you determine if your company is exempt from filing a BOI Report.
Who files the BOI Report for a closed business?
The previous owners or managers of a dissolved entity can authorize any individual or hire a third party who offers a BOI Report filing service to submit a BOI Report on their behalf. The responsibility, however, still falls on the beneficial owners of the company or whoever owned a significant portion of or exercised substantial control over the entity when it was formed.
What if a dissolved entity doesn’t file a BOI Report?
Dissolved entities that do not file the BOI Report could face a daily penalty fee of $591, up to $10,000, and up to two years of imprisonment. FinCEN does explicitly state that criminal penalties apply to acts of willful failure to file, but they haven’t defined exactly how they’ll determine whether someone is complicit in their non-compliance. So, even a late report is worth filing if you haven’t done so yet, if only just to dodge merciless late fees.
*This is informational commentary, not advice. This information is intended strictly for informational purposes and does not constitute legal advice or a substitute for legal counsel. This information is not intended to create, nor does your receipt, viewing, or use of it constitute, an attorney-client relationship. More information is available in our Terms of Service.
