Ordinarily, such a reporting company reports the individuals who indirectly either (1) exercise substantial control over the reporting company or (2) own or control at least 25 percent of the ownership interests in the reporting company through the corporate entity. It should not report the corporate entity that acts as an intermediate for the individuals.
For an example of how to calculate the percentage of ownership interests an individual owns or controls in a reporting company if the individual’s ownership interests are held through an intermediate entity, please review example 4 in Chapter 2.3, “What steps can I take to identify my company’s beneficial owners?” of FinCEN’s Small Entity Compliance Guide.
Two special rules create exceptions to this general rule in very specific circumstances:
A reporting company may report the name(s) of an exempt entity or entities in lieu of an individual beneficial owner who owns or controls ownership interests in the reporting company entirely through ownership interests in the exempt entity or entities; or
If the beneficial owners of the reporting company and the intermediate company are the same individuals, a reporting company may report the FinCEN identifier and full legal name of an intermediate company through which an individual is a beneficial owner of the reporting company.
FinCEN’s Small Entity Compliance Guide includes additional information about these special reporting rules (see Chapter 4.2, “What do I report if a special reporting rule applies to my company?”).
[Issued January 12, 2024]