Beneficial ownership is the concept of who really owns, controls or benefits from a company, trust or other legal arrangement, as opposed to who is named as the legal owner. The real people at the end of the chain are called ultimate beneficial owners, and the full explanation of how they are identified and why it matters is in the Ultimate Beneficial Owner (UBO) entry.
The gap between legal and beneficial ownership is what makes shell companies useful for hiding money. Shares may be held by a nominee owner or by another company in a different country, while the person giving instructions never appears on a register. For this reason anti-money-laundering rules require banks and other firms to identify beneficial owners as part of customer due diligence. A common threshold is ownership of 25% or more, together with anyone who controls the entity by other means.
Many countries also keep central registers of beneficial owners. In the United States, company filings of beneficial ownership information were introduced by the Corporate Transparency Act, although their scope was later narrowed.