The CTA’s Inactive Entity Exemption

I am happy to report that there has been released the Spring, 2025 issue of The Business Lawyer and with it the article co-authored by Bob Keatinge (of Ribstein and Keatinge on Limited Liability Companies fame) and me titled: The CTA’s “Inactive Entity” Exemption and Irrevocable Dissolution – “I’m Not Dead Yet.” 

This is a true “deep dive”; while in the statute this exemption is about 100 words, we used almost 20,000 words to in detail dissect and then apply the CTA’s “Inactive Entity” exemption - sometimes (as here) the situation is so muddled that a great many words are required to unravel the “Gordian Knot.” We as well considered and applied the various FAQs that in effect created an alternative mechanism for exclusion from reporting company status, a mechanism that may well be more important than the statutory/regulatory regime. 

We thought this exercise to be important in that unlike the CTA’s (then) 22 other exemptions, almost all reporting companies will someday want to exit the obligation to file CTA BOIRs via the “Inactive Company” exemption. While this analysis has as to domestic companies lost its application under the current interim final rule, the analysis is particularly pertinent to foreign companies aiming to end their obligation to file beneficial ownership information reports as they for all intents and purposes cannot satisfy the statutory/regulatory exemption. 

While neither bears any responsibility for the errors contained in this piece, the contributions of Diane Babal (ABA/BLS) and Christina M. Houston (DLA Piper) must be acknowledged; thank you each.

As always I am indebted to Bob Keatinge for the opportunity to work with him.

P.S. - we hope you will enjoy the “atypical” references distributed throughout the footnotes, they including the movies Unforgiven, Lord of the Rings, and Monty Python and the Holy Grail, Italo Calvino’s novella The Nonexistent Knight, Erasmus of Rotterdam’s Adages and Homer’s Odyssey.