How to Identify Beneficial Owner [Business Banking]

In this article, we’ll share how to identify the beneficial owner of a company.

Fortunately, if you are the owner of a company, this will be a very easy process… it’s you.

For everyone else, identifying the beneficial owner can be a bit more challenging. That said, it ultimately depends on where the business is registered and what access you have to the necessary information.

This article is part of our series on business banking, including free articles that range in topic from merchant accounts to opening a bank account for ecommerce businesses – click here to get access now.

Feel free to use the table of contents to jump ahead to the sections most relevant to you.

Table of Contents

  1. How to Identify Beneficial Owner
  2. What Are the Duties of Beneficial Owners?
  3. Frequently Asked Questions
  4. Ready to Explore Your Options?

How to Identify Beneficial Owner

The process to identify a beneficial owner will depend on where a company is registered, how you plan to access company data, and your requirements. For instance, in India, you need to contact the Registrar of Companies in the corresponding state or territory to identify a beneficial owner. However, in many US states like Wyoming or Nevada, beneficial owner information is not available to the public. 

Of course, many businesses have more than one owner. When this is the case, it’s important to note that any individual (or entity) with more than 25% ownership in a company is considered a beneficial owner.

However, for reporting purposes, it’s not uncommon for banks to request that anyone with 10% of the outstanding shares in a company be listed as an owner. Similarly, key management roles are often required to provide the same information as beneficial owners during bank account opening.

That said, identifying a beneficial owner can be challenging in certain countries and extremely easy in others. Additionally, it can be more difficult to identify the beneficial owners of certain companies over others.

For example, the United Kingdom has a similar registrar to India, which they call Companies House. On Companies House, anyone can find information on the beneficial owners of a company without payment, verification, or questions.

On the other hand, the public cannot access information on private partnerships in many jurisdictions, like those registered in the Canadian provinces of British Columbia or Ontario.

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What Are the Duties of Beneficial Owners?

The duties of a beneficial owner ultimately depend on what role they play in the company. For example, in small operating businesses, the beneficial owner is often the operator and is responsible for the day-to-day activities of running the business.

However, in a large publicly listed company, the beneficial owner may have disclosure requirements but they do not have a hands-on role.

In the case of both a publicly listed company and a small business, beneficial owners are often directors as well, which involves a much wider range of responsibilities.

Of course, when it comes to banking, the duties of beneficial owners include disclosing the necessary information related to their ownership. Let’s take a closer look at what these include.

Beneficial Ownership Requirements

Anyone who directly or indirectly controls 25% or more of the outstanding shares in a legal entity is considered a beneficial owner. These individuals are required to identify themselves and report their ownership in an entity.

Frequently Asked Questions

Below are three of the most common questions that we receive from people wondering how to identify a beneficial owner. If you have further questions you would like answered, don’t hesitate to get in touch with us directly.

What Is an Example of a Beneficial Owner?

An example of a beneficial owner is anyone who directly or indirectly owns or controls 25% or more of a legal entity. This measure applies to privately owned businesses, publicly traded companies, and every entity in between.

How Do You Find a Beneficial Owner?

To find a beneficial owner, you will need to consider the country where a company is registered. This is because beneficial owner information is included in the local company registry. Of course, certain countries do not have public registries. So, information about the beneficial owner may not be public.

Who Is Not a Beneficial Owner?

Anyone who does not directly or indirectly own or control 25% or more of a company is not considered a beneficial owner. This measure applies to privately owned businesses, public companies, and every entity in between.

Ready to Explore Your Options?

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Of course, if you have any questions, please contact us directly.

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