What is a beneficial owner?
A beneficial owner is a person who ultimately owns or controls a business, including through another company.
For an ordinary, non-listed company, UK money laundering rules include individuals who ultimately own or control more than 25% of its shares or voting rights, or otherwise control its management. Ownership percentages are only part of the assessment.
HMRC: required customer due diligence measuresDoes exactly 25% count?
Exactly 25% does not, by itself, meet the “more than 25%” ownership threshold. However, the person may still qualify through voting rights or other control.
For example, if four people each hold 25%, your firm still needs to understand how the company is controlled. Equal shareholdings do not establish that there is nobody to identify.
Companies House: PSC guidanceIs a beneficial owner the same as a director or representative?
These are different roles, although one person may hold several.
A director or representative is not automatically a beneficial owner. Your firm should establish each relevant person’s role and the checks required for that role.
- Beneficial owner: ultimately owns or controls the company.
- Director: holds a formal role in managing the company.
- Authorised representative: acts on the company’s behalf.
What should your firm check?
Identify the beneficial owners and take reasonable measures to verify their identities. Understand how ownership and control work, including any companies between your client and the people who ultimately own it.
Keep a record of the information reviewed, the evidence used and how your firm reached its conclusion. More complex structures may require further enquiries.
HMRC: required customer due diligence measuresHow does the Companies House PSC register help?
The register provides useful information about people with significant control. Review it alongside the ownership information and evidence obtained during due diligence.
A PSC and a beneficial owner under money laundering rules are not always the same. A difference between your findings and the register does not automatically mean the register is wrong; assess whether discrepancy-reporting requirements apply.
Companies House: reporting discrepanciesHow AMLCode is designed to help
AMLCode is designed to bring company information, checks on relevant people and supporting evidence into one client case for your firm’s review. Our planned packages include checks for up to five people per company case. One person counts once, even if they hold several roles. This is a package allowance, not a legal limit on how many people your firm may need to check.
This is a general introduction. Use current legislation and the guidance relevant to your services and supervisor when setting your firm’s procedures.