Who is a Beneficial Owner?
A beneficial owner is a natural person who owns or has control over a legal entity. They are the person who receives the benefits of ownership, such as profits or control. They are not necessarily the person who is named on the legal documents as the owner.
A beneficial owner can be anyone, regardless of their nationality, residency, or citizenship. They can be an individual or a group of individuals. However, they must always be a natural person.
Understanding Beneficial Owner
A beneficial owner is basically a regular person who owns or oversees a company through having a bunch of stocks, holdings, or voting rights in it, either directly or indirectly. In simpler terms, it's someone who can influence what happens with a particular company's securities, like its shares.
They enjoy the extras of ownership, even if someone else officially owns the company's assets. Sometimes, they might use certain ways like bearer shares or other schemes. To keep things straightforward and safe, these owners often put publicly traded stocks in the name of a broker.
Also, if you have a subsidiary company that's owned by another company, a person who holds more than 25% of the shares in the parent company is considered the beneficial owner of the subsidiary.
Why is beneficial ownership important?
To promote transparency regarding the ownership and control of companies and other legal entities, it's important to reveal who ultimately own, control, and have significant stakes in or receive substantial financial benefits from a corporation