Under the Corporate Transparency Act (the “CTA”) as enacted and as reflected in the Reporting Rules adopted in 2022, almost every LLC, corporation, and similar business organization in the United States is subject to beneficial ownership reporting requirements. A crucial mechanism for ending those reporting requirements is the application of an exemption written for “inactive entities”; in operation this may (or at least was anticipated to be) the most commonly relied upon exemption. In 2024, FinCEN, via a series of FAQs, created an alternative mechanism of exempting a company from the CTA’s reporting obligations, an exemptive scheme that is especially important to non-U.S. organized ventures, they being largely excluded from the statutory/regulatory scheme. Herein we attempt to unravel the oft contradictory requirements, concluding with a pair of hypothetical situations.
June 18, 2025
The CTA’s “Inactive Entity” Exemption and Irrevocable Dissolution—“I’m Not Dead Yet”
Written By
Thomas E. Rutledge
Member,
Stoll Keenon Ogden PLLC
