A beneficial owner is another name for an ultimate beneficial owner (UBO): the natural person who ultimately owns or controls a company, trust or other legal arrangement, or on whose behalf a transaction is carried out. The word "ultimate" is often added to stress that the owner must be a real individual, not another company in the ownership chain. The main entry covers ownership thresholds, control tests and how banks verify owners.
How the term is used
In anti-money laundering rules, the beneficial owner is the person behind the legal owner. A company's shares may be registered to a holding company or a nominee, but the beneficial owner is whoever ultimately enjoys the benefits or exercises control. Banks identify beneficial owners as part of customer due diligence, and many countries keep registers of them. The wider concept, including disclosure regimes, is described under beneficial ownership.
FATF standards and most national laws treat a 25% ownership stake as a common starting point, alongside tests of control by other means. In the United States, the Corporate Transparency Act introduced reporting of beneficial ownership information to FinCEN, although its scope has since been narrowed.
In securities markets the term has a related sense: the investor entitled to the income and value of shares held in the name of a custodian or broker. Both meanings rest on the same idea, that legal title and real economic interest can sit with different parties.