Is a reporting company’s designated “partnership representative” or “tax matters partner” a beneficial owner?

It depends. A reporting company’s “partnership representative,” as defined in 26 U.S.C. 6223 , or “tax matters partner,” as the term was previously defined in now-repealed 26 U.S.C. 6231(a)(7), is not automatically a beneficial owner of the reporting company. However, such an individual may qualify as a beneficial owner of the reporting company if the individual exercises substantial control over the reporting company, or owns or controls at least 25 percent of the company’s ownership interests. Chapter 2 of FinCEN’s Small Entity Compliance Guide (“Who is a beneficial owner of my company?”) has additional information on how to determine if an individual qualifies as a beneficial owner of a reporting company. Note that a “partnership representative” or “tax matters partner” serving in the role of a designated agent of the reporting company may qualify for the “nominee, intermediary, custodian, or agent” exception from the beneficial owner definition. FinCEN’s Small Entity Compliance Guide includes additional information on such exemptions in Chapter 2.4, “Who qualifies for an exception from the beneficial owner definition?”