Ultimate Beneficial Owner

UBO is the short form of the term ‘Ultimate Beneficial Owner’ In the context of financial regulations and corporate law, this term refers to the individual who, either directly or indirectly, owns or controls an entity. The ownership or control could be through the holding of a significant proportion of the entity’s shares, having voting rights, or through other means that give the individual influence over the entity’s activities.

The term UBO is used primarily in the context of the measures taken to prevent money laundering, terrorist financing, and other illicit activities. As part of the anti-money laundering (AML) and counter-terrorist financing (CFT) framework, businesses and financial institutions are required to identify and verify the UBOs of their clients, especially those that are legal persons or arrangements. In this regard, the UBO is usually the person who has the ultimate control over an entity, irrespective of the legal form of the entity. For instance, in a corporate structure, the UBOs would be the individuals who own or control more than 25% of the shares or voting rights of the company. However, in certain situations, the threshold might be lower, depending on the risk assessment.This responsibility to identify and verify the UBOs forms part of the ‘Know Your Customer’ (KYC) due diligence that entities are obliged to conduct under the AML and CFT regulations. This process can be quite complex, especially when dealing with entities that have intricate ownership or control structures, often spanning several jurisdictions.An ubiquitous tool used in this process is the UBO box. This is a centralized repository of information about UBOs, that entities can use to efficiently manage and access their UBO data. This, in turn, aids in regulatory reporting and monitoring for any significant changes in the ownership or control structure of the client entities.

UBO

Understanding beneficial ownership

  • Identify beneficial owners
  • Ultimate owner importance
  • Compliance requirements
  • Risk management strategies

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