Beneficial Ownership: Identifying the True Owners

In recent years, there has been a growing emphasis on identifying the true owners behind companies. This is particularly important in cases where the aggregate ownership of a company exceeds the threshold for beneficial ownership.

Company PQR’s Beneficial Owners Identified

A closer examination of Company PQR’s ownership structure revealed that individual D holds an indirect beneficial interest in Company XYZ through their controlling stake in Company PQR. With an ownership percentage of 25.8%, individual D meets the qualifying threshold for beneficial ownership.

• Individual E, on the other hand, does not meet the threshold with an ownership percentage of 4.3%. As a result, identification information is not required for this individual.

Ultimate Beneficiary Owners (UBOs) Identified

The determination of UBOs requires identifying all individuals who directly and/or indirectly own at least 25% of the property ownership. This may involve tracing ownership through multiple layers of entities or trusts.

• In one example, Individual A and Individual B would need to identify themselves as they directly own or control 25% or more of the customer.
• In another example, indirect ownership was calculated by multiplying the ownership interest of each entity in the property chain. The results showed that individual B and individual D would need to be identified as they indirectly own or control 25% or more of the customer.

Entities with Control

For certain types of entities, such as publicly traded companies, government entities, collective investment vehicles, or trusts, it may not always be possible or practical to determine actual ownership based on individual capital interest. In these cases, the entity should be treated as an effective beneficiary in their own right and a representative with control over that entity identified as substitutes.

Publicly Traded Company 123

In one example, Publicly Traded Company 123 holds an equity share of 30% in the client. This would not require identifying any substitute individuals.

Trust 456

Another example is Trust 456, which holds a 58.5% aggregate customer ownership interest through its property chain. The trustees and beneficiaries of the trust must be identified.

Conclusion

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The identification of beneficial owners is crucial for regulatory compliance and transparency in financial transactions. As companies continue to evolve and complex ownership structures emerge, it becomes increasingly important to stay vigilant and ensure that the true owners are properly disclosed.