What is a beneficial owner?
A beneficial owner in respect of a company means the natural person(s) who directly or indirectly ultimately owns or controls the corporate entity, with control defined consistently with the interpretative provisions applying to the new public register of persons with significant control of UK companies introduced in the Small Business, Enterprise and Employment Act 2015 (the “PSC Register”).
Meaning of person with significant control: A person with significant control over a company is defined as an individual that (either alone or as one of a number of joint holders of the share or right in question) meets one of the following conditions:
The individual holds, directly or indirectly, more than 25% of the shares in the company. The 25% threshold is calculated with reference to the nominal value of the shares in the case of a company with share capital. If the company does not have a share capital, the condition is met by an individual holding a right to share in more than 25% of the entity’s capital or profits.
The individual holds, directly or indirectly, more than 25% of the voting rights in the company. Voting rights held by the company itself are disregarded for this purpose.
The individual holds the right, directly or indirectly, to appoint or remove a majority of the board of directors of the company. The individual has the right to exercise, or actually exercises, significant influence or control over the company. The Secretary of State for Business Innovation and Skills is required to issue guidance on the meaning of ‘significant influence or control’ and regard must be had to that guidance (once available) in interpreting this condition.
The trustees of a trust or the members of a firm that is not a legal person exercise control over the company through one or more of 1. to 4. above in their capacity as such or would do if they were individuals, and the individual has the right to exercise, or actually exercises, significant control or influence over the activities of that trust or firm.
Meaning of person with significant control: A person with significant control over a company is defined as an individual that (either alone or as one of a number of joint holders of the share or right in question) meets one of the following conditions:
The individual holds, directly or indirectly, more than 25% of the shares in the company. The 25% threshold is calculated with reference to the nominal value of the shares in the case of a company with share capital. If the company does not have a share capital, the condition is met by an individual holding a right to share in more than 25% of the entity’s capital or profits.
The individual holds, directly or indirectly, more than 25% of the voting rights in the company. Voting rights held by the company itself are disregarded for this purpose.
The individual holds the right, directly or indirectly, to appoint or remove a majority of the board of directors of the company. The individual has the right to exercise, or actually exercises, significant influence or control over the company. The Secretary of State for Business Innovation and Skills is required to issue guidance on the meaning of ‘significant influence or control’ and regard must be had to that guidance (once available) in interpreting this condition.
The trustees of a trust or the members of a firm that is not a legal person exercise control over the company through one or more of 1. to 4. above in their capacity as such or would do if they were individuals, and the individual has the right to exercise, or actually exercises, significant control or influence over the activities of that trust or firm.
Updated on: 29/03/2020
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