In the context of company ownership, the ultimate beneficial owner (UBO) of the company is the person who is the actual economic owner of the business, and thus entitled to the benefits from that business (such as dividends and gains from the sale of that company). The ultimate beneficial owner is, therefore, also the person who bears the actual economic risk in case of the failure of the company, in the simplest form, by losing the capital that has been invested in that business. Quite often (but not always), the ultimate beneficial owner is the person who has conceived the business that the company carries out, and has established the company for that purpose. Obviously, a business may have one or several beneficial owners. The beneficial owner and the shareholder of a company can be the same person (and often are), but this is not always the case. It’s particularly true when the beneficial owner has chosen to employ a nominee shareholder in order to achieve a degree of privacy.
For practical compliance and due diligence purposes, financial service providers (such as banks and company administration firms, like ourselves) will always seek to establish and verify who is the ultimate beneficial owner of the company and the assets committed to that new business. This is a legal requirement, stemming, in particular, from the anti-money laundering laws and regulations.
