1010.230 (e) Legal entity customer. For the purposes of this section:

(1) Legal entity customer means a corporation, limited liability company, or other entity that is created by the filing of a public document with a Secretary of State or similar office, a general partnership, and any similar entity formed under the laws of a foreign jurisdiction that opens an account.

Question: I have two brothers who operate a farming operation. They have accounts under the name of the informal partnership name. They are not registered as a general partnership with the Secretary of State so would be an informal partnership. Would they be subject to the beneficial ownership rules or do they have to be registered with the Secretary of State.

Thank you for the guidance.

That is a State law issue whether they have to be registered. But even if they are not required to register by the State - they would still fall under BO requirements.

I am getting several questions from my ag lender. We have several loans where there may be multiple family members operating a farming operation. The loans are in the names of the member and there is no written partnership agreement in place. How do we determine BO? For example, if there are four people operating the operation together, do we assume 25% ownership or can we rely on what they tell us? They may not even be able to tell us that information. In reading the April FinCEN FAQs, number 22 addresses spouses operating together being exempt from the requirements but does not talk about non-spousal arrangements. There is a lot of confusion on these farming arrangements. Thank you for your guidance.

Regarding the BO - why don't you have the client complete the certification form and tell you? You're not required to verify the information the client confirms to you regarding the BO of a LEC.

Thank you for the comment. My question is, are they even covered since the loans are in the individual names and there is no written partnership agreement.

How do they report the income from the farm on their tax returns? If they are using Schedule K-1s, you know they have a partnership and are subject to the BO rule.

Thank you for the guidance.