beneficial owner (2024)

FAQs

Who is a beneficial owner answer? ›

A beneficial owner is someone who owns at least part of a property or other asset, even if its legal title is owned by someone else. That person can also vote on or otherwise influence decisions regarding transactions involving that asset or property. An example is a corporate shareholder.

Who is considered a Beneficial Owner? An individual (or “natural person”) who has significant responsibility to control, mange or direct the legal entity customer. This person is also known as a “Control Person.”

This percentage allows the possibility of up to four “ownership” individuals and one control individual for each new covered entity customer. If no individual owns 25% or more of the legal entity then only the control person must be identified.

In the case of a company, a minimum threshold of over 25% interest has been established, while for a partnership firm or trust, the minimum ownership interest required for someone to be deemed a beneficial owner is 15%.

A beneficial owner is an individual who ultimately owns or controls an entity such as a company, trust or partnership. 'Owns' in this case means owning 25% or more of the entity. This can be directly (such as through shareholdings) or indirectly (such as through another company's ownership or through a bank or broker).

Beneficial Owners

Individuals considered to “exercise significant control” over your company are those responsible for managing and directing the business and may include executive officers or senior managers, such as CEO, CFO, COO, Managing Member, General Partner, President, Vice President, or Treasurer.

Someone who has beneficial ownership of a company is said to have more than 25% of the company's shares to 25% control over the voting rights. Alternatively, they may have such controls in place as to have similar influence over how the company is run.

Beneficial ownership reports

If your company has registered a class of its equity securities under the Exchange Act, shareholders who acquire more than 5% of the outstanding shares of that class must file beneficial owner reports on Schedule 13D or 13G until their holdings drop below 5%.

Under the ownership prong, a beneficial owner is each individual, if any, who, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, owns 25 percent or more of the equity interests of a legal entity customer.

Are some companies exempt from the reporting requirement? Yes, 23 types of entities are exempt from the beneficial ownership information reporting requirements. These entities include publicly traded companies meeting specified requirements, many nonprofits, and certain large operating companies.

How do you calculate beneficial ownership? ›

Beneficial Ownership Percentage is calculated by dividing the number of Ordinary Shares and Share Equivalents of which a person is a Beneficial Owner as of a specific date by the total number of Ordinary Shares outstanding at that moment.

A reporting company can have multiple beneficial owners. For example, a reporting company could have one beneficial owner who exercises substantial control over the reporting company and a few other beneficial owners who own or control at least 25 percent of the ownership interests of the reporting company.

Determining beneficial ownership & control

This is most commonly achieved by asking the customer and then validating the information they provide by consulting independent and reliable documentation or electronic data.

Does an LLC have a beneficial owner? Yes. A beneficial owner is defined as any individual who, directly or indirectly, either exercises substantial control over a reporting company or owns or controls at least 25 percent of the reporting company's ownership interests.

Beneficial ownership in respect of a company means, an individual who, directly or indirectly, ultimately owns that company or exercises effective control over that company.

(i) where the member is a company, the significant beneficial owner is the natural person, who, whether acting alone or together with other natural persons, or through one or more other persons or trusts, holds not less than ten per cent.