Spin out of PEO

An Adopting Employer left a PEO in 2021. For the 2021 Plan Year, there are 106 participants as on 1/1/2021. Does the Plan need a 5500 with audit for 2021, or can it file the 5500-SF under the 80/120 rule? 

If this is a new separate plan that started for the employer after leaving the PEO and are truly/technically over 100 participants at start of the year (check and verify under terms of the plan and 5500 instructions) then I think the 80-120 rule doesn't apply. That rule is for existing plans that flip flop over and under 100 participants.