{"id":594,"date":"2026-09-23T18:26:11","date_gmt":"2026-09-23T22:26:11","guid":{"rendered":"https:\/\/blogs.duanemorris.com\/bankinglaw\/?p=594"},"modified":"2026-09-23T18:26:11","modified_gmt":"2026-09-23T22:26:11","slug":"sole-proprietorships-not-a-company-under-regulation-w","status":"publish","type":"post","link":"https:\/\/blogs.duanemorris.com\/bankinglaw\/2026\/09\/23\/sole-proprietorships-not-a-company-under-regulation-w\/","title":{"rendered":"Sole Proprietorships &#8211; Not a &#8216;&#8221;Company&#8221; Under Regulation W"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">Regulation W applies to transactions between a bank and its affiliates, but the definition of &#8220;affiliate&#8221; requires that the counterparty be a &#8220;company.&#8221; This raises a fundamental question: what qualifies as a <em>company <\/em>for Regulation W purposes?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The answer <em>excludes <\/em>sole proprietorships &#8211; a sole proprietorship is not a company for purposes of Regulation W. This means that even if an individual who operates a sole proprietorship also controls a bank, the sole proprietorship itself cannot be an affiliate of the bank under Regulation W.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This distinction is rooted in the definition of &#8220;company&#8221; under banking law, which generally encompasses corporations, partnerships, limited liability companies, business trusts, and similar organizations, but <strong>not <\/strong>unincorporated businesses operated by a single individual in their personal capacity.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">However, banks should not treat this as a blanket safe harbor. Transactions with sole proprietors who are insiders may still be subject to other regulatory requirements, including Regulation O governing insider lending, and general safety and soundness standards. Additionally, the <strong>attribution rule<\/strong> could apply if loan proceeds to a sole proprietor are transferred to an affiliated entity.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>DM Tip: <\/strong>While sole proprietorships fall outside Regulation W&#8217;s affiliate framework, ensure your compliance program still captures transactions with sole proprietors who are insiders or who may transfer proceeds to affiliated entities. Cross-reference your Regulation O and Regulation W monitoring systems.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Regulation W applies to transactions between a bank and its affiliates, but the definition of &#8220;affiliate&#8221; requires that the counterparty be a &#8220;company.&#8221; This raises a fundamental question: what qualifies as a company for Regulation W purposes? The answer excludes sole proprietorships &#8211; a sole proprietorship is not a company for purposes of Regulation W. &hellip; <\/p>\n<p class=\"link-more\"><a href=\"https:\/\/blogs.duanemorris.com\/bankinglaw\/2026\/09\/23\/sole-proprietorships-not-a-company-under-regulation-w\/\" class=\"more-link\">Continue reading<span class=\"screen-reader-text\"> &#8220;Sole Proprietorships &#8211; Not a &#8216;&#8221;Company&#8221; Under Regulation W&#8221;<\/span><\/a><\/p>\n","protected":false},"author":693,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"ppma_author":[502],"class_list":["post-594","post","type-post","status-publish","format-standard","hentry","category-general"],"authors":[{"term_id":502,"user_id":693,"is_guest":0,"slug":"jsilvia","display_name":"Joseph E. Silvia","avatar_url":"https:\/\/blogs.duanemorris.com\/bankinglaw\/wp-content\/uploads\/sites\/14\/2024\/09\/silviajoseph-100x100.jpg","author_category":"","last_name":"Silvia","first_name":"Joseph E.","job_title":"","user_url":"https:\/\/www.duanemorris.com\/attorneys\/josephsilvia.html","description":"<a href=\"https:\/\/www.duanemorris.com\/attorneys\/josephsilvia.html\">Read Joseph's bio.<\/a>"}],"_links":{"self":[{"href":"https:\/\/blogs.duanemorris.com\/bankinglaw\/wp-json\/wp\/v2\/posts\/594","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.duanemorris.com\/bankinglaw\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.duanemorris.com\/bankinglaw\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/bankinglaw\/wp-json\/wp\/v2\/users\/693"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/bankinglaw\/wp-json\/wp\/v2\/comments?post=594"}],"version-history":[{"count":1,"href":"https:\/\/blogs.duanemorris.com\/bankinglaw\/wp-json\/wp\/v2\/posts\/594\/revisions"}],"predecessor-version":[{"id":595,"href":"https:\/\/blogs.duanemorris.com\/bankinglaw\/wp-json\/wp\/v2\/posts\/594\/revisions\/595"}],"wp:attachment":[{"href":"https:\/\/blogs.duanemorris.com\/bankinglaw\/wp-json\/wp\/v2\/media?parent=594"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/bankinglaw\/wp-json\/wp\/v2\/categories?post=594"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/bankinglaw\/wp-json\/wp\/v2\/tags?post=594"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/bankinglaw\/wp-json\/wp\/v2\/ppma_author?post=594"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}