Beneficial ownership
UBOAlso called ultimate beneficial owner, person with significant control
Beneficial ownership identifies the real people who ultimately own or control a company, trust or other legal entity, even when ownership runs through layers of companies or nominees. An ultimate beneficial owner usually holds more than 25% of shares or voting rights, or controls the entity by other means such as appointing the board.
How it works
When a company opens an account, the firm maps its ownership chain to find the individuals at the top. It collects details of each beneficial owner, verifies their identity and checks the structure makes sense. Where nobody meets the threshold, firms usually record the senior managing official. Public or central registers help, but firms remain responsible for their own checks.
Beneficial ownership matters because shell companies and trusts are a common way to hide criminal or sanctioned money. Sanctions screening depends on it too, since entities owned 50% or more by designated persons can be frozen. Rules differ: the UK and US use thresholds of more than 25% and 25% or more, and the EU moves to 25% or more from July 2027.
The rules
Require countries to ensure adequate, accurate and up-to-date beneficial ownership information on legal persons and arrangements, including through a registry or equivalent.
Countries, which apply them to regulated firms through national lawCompanies report people holding over 25% of shares or votes, or significant control, and regulated firms must identify and verify customers' beneficial owners.
UK companies and LLPs; MLR-regulated firmsDefines beneficial owners as holding 25% or more of ownership interests or controlling by other means, and requires obliged entities to identify and verify them.
Credit and financial institutions and other obliged entities in the EUBanks identify individuals owning 25% or more and one control person; Corporate Transparency Act reporting now applies only to foreign-formed registered companies.
Covered financial institutions; foreign entities registered to do business in the USCommon questions
What is the ownership threshold for a UBO?
It depends on the rules. UK law uses more than 25% of shares or voting rights. The US CDD rule and the EU AMLR, from 10 July 2027, use 25% or more. Firms can apply lower thresholds for higher-risk customers.
Do US companies still report beneficial ownership to FinCEN?
No. A FinCEN final rule published on 14 August 2026 made permanent the March 2025 exemption for US companies and US persons. Only companies formed under foreign law and registered to do business in the US must report.
Can a firm rely on a company register?
Registers are a useful starting point but firms cannot rely on them alone. UK and EU rules require firms to take their own risk-based steps to verify beneficial owners, and UK firms report material discrepancies to Companies House.
What if no one owns more than 25%?
Control by other means counts, such as the right to appoint directors. If no individual can be identified after exhausting the options, firms usually record the senior managing official and keep notes of the steps taken.
Our coverage
News and analysis on KYC and identity from RegTech Post.
Read the coverage →RegTech PostBeneficial Ownership Explained: A Comprehensive Guide for VerificationRead the article →RegTech PostFinCEN Ends Beneficial Ownership Reporting for US CompaniesRead the article →
