Ultimate beneficial owner (UBO): definitions and registers

Definitions of beneficial ownership

A person with significant control (PSC) is someone who owns or controls a company, and such persons are sometimes called 'beneficial owners'. A company can have one or more PSCs.

Under Directive (EU) 2015/849, a beneficial owner is any natural person who ultimately owns or controls the customer, or on whose behalf a transaction or activity is being conducted. This definition includes at least the natural persons who hold ownership interests or exercise control through other means.

The concept of beneficial ownership is distinct from legal ownership. Legal ownership refers to the registered holder of shares or assets, while beneficial ownership identifies the natural person who ultimately enjoys the economic benefits and control.

Thresholds for ownership and control

Under Directive (EU) 2015/849, a shareholding of 25% plus one share or an ownership interest of more than 25% in the customer held by a natural person is an indication of direct ownership. A shareholding of 25% plus one share or an ownership interest of more than 25% held by a corporate entity under the control of a natural person, or by multiple corporate entities under the control of the same natural person, is an indication of indirect ownership.

Member States may decide that a lower percentage than 25% is an indication of ownership or control. This flexibility allows jurisdictions to set stricter thresholds where they consider it appropriate.

In the United Kingdom, a PSC is usually anyone who has more than 25% shares or voting rights in a company, can appoint or remove a majority of directors, or can influence or control the company or trust. The level of shares and voting rights must be reported within categories: over 25% up to and including 50%, more than 50% and less than 75%, or 75% or more.

Reporting obligations for companies

Companies must include PSC details when they incorporate and must tell Companies House if there are any changes. If a company cannot identify its PSC, or does not have one, it must tell Companies House. If there are no PSCs for a company, the company must tell Companies House and its PSC information cannot be blank.

Companies must notify Companies House of any changes to PSC information, such as a change of personal details or nature of control. This notification must be made within 14 days of confirming the change.

When registering PSC information, companies must confirm certain details with the PSC, including name, date of birth, nationality, country of residence, a service address, home address, the date they became a PSC, the date they confirmed their details, and all natures of control which apply.

Public registers of beneficial ownership

Companies House maintains the public register of people with significant control for companies incorporated in the United Kingdom. The register records the PSC details that companies are required to file.

Beyond national registers, the Global Legal Entity Identifier Foundation (GLEIF) offers a unique and free data source that allows corporate dots to be connected globally based on open, standardized and high quality LEI data. Legal entities that have or acquire an LEI report their direct accounting consolidating parent and their ultimate accounting consolidating parent.

The principles governing the collection of data on direct and ultimate parents in the Global LEI System are set out in a policy document published by the Regulatory Oversight Committee in March 2016. Data collection on direct and ultimate parents in the Global LEI System was initiated in May 2017.

Any interested party can access and search the complete LEI data pool free of charge and without the need to register. The LEI data pool includes both Level 1 data, which provides the official name and registered address of a legal entity, and Level 2 data, which answers the question of who owns whom.

If the direct and ultimate parents of an LEI registrant have obtained an LEI, the LEI of the parent or parents is published together with the LEI record of the child entity. Likewise, the LEI record of an organization that is the direct or ultimate parent of another organization that has obtained an LEI will display the LEI of the child entity or entities.

The Global LEI Index contains historical and current LEI records including related reference data in one authoritative, central repository. GLEIF offers various means to access the publicly available LEI data pool.