A range of information must be provided about trusts and their beneficial owners. 'Beneficial owners' are defined as being the settlor(s), beneficiaries, trustees and any individual who has control over a trust, which can include trust protectors.
A beneficial owner is an individual who ultimately owns or controls an entity such as a company, trust or partnership. 'Owns' in this case means owning 25% or more of the entity. This can be directly (such as through shareholdings) or indirectly (such as through another company's ownership or through a bank or broker).
What constitutes beneficial ownership? The U.S. government regulation defines “beneficial ownership' as being made up of two prongs (1) Ownership Prong and (2) Control Prong. A beneficial owner is an individual, if any, who, directly or indirectly, owns 25% or more of the equity interest of a legal entity customer.
The settlor, the trustee, the protector, the beneficiaries and any natural person exercising ultimate control or influence over a trust by means of ownership or by other means should be all identified as UBOs.
An Ultimate Beneficial Owner (UBO) is any natural person that ultimately owns or controls the customer and/or the natural person on whose behalf a transaction or activity is being conducted.
Successfully establishing who the ultimate beneficial owner(s) of an entity is takes place through a series of checks - often via a process known as KYB or as part of an onboarding or ongoing Know Your Customer (KYC), Customer Due Diligence (CDD) or third-party due diligence program.
If a trust, directly or indirectly, has 25% or more ownership interest in your company, the trustee is the beneficial owner. Where there are multiple trustees or co-trustees, the name, address, date of birth and identification number of at least one trustee must be provided.
For change in ownership purposes, the present beneficiary of an irrevocable trust is considered to be the owner of the present beneficial interest in property held by the trust.
Are some companies exempt from the reporting requirement? Yes, 23 types of entities are exempt from the beneficial ownership information reporting requirements. These entities include publicly traded companies meeting specified requirements, many nonprofits, and certain large operating companies.
In the case of a Discretionary Trust, the Trustee has legal control of the funds. Therefore, they are the legal owner. However, the funds are held and distributed to benefit the beneficiaries. The beneficiaries are the beneficial owners.
A beneficial owner is someone who enjoys the benefits of ownership, such as profits or control, even if the ownership is indirect. In contrast, a UBO is the person or entity at the very top of the ownership chain who ultimately exercises control over the company or its assets.
A beneficial owner of a trust is an individual who owns or controls the trust, for example the trustee or an individual who holds the power to appoint or remove the trustees of the trust.
Where the trust has a corporate trustee, the company extract will contain the shareholders. If the corporate trustee is owned by other companies, the shareholders of those companies must also be reviewed, to determine the ultimate beneficial owner of the corporate trustee.
If a trust is a grantor trust, then the grantor is treated as the owner of the assets, the trust is disregarded as a separate tax entity, and all income is taxed to the grantor.
A trust is an agreement where someone (a trustor) gives legal ownership of assets to someone else (a trustee) in order to manage them on behalf of a third party (beneficiary). In some cases, a trustee can be a beneficial owner of a trust if they also stand to personally benefit from how the assets are managed.
Beneficial Owners
Individuals considered to “exercise significant control” over your company are those responsible for managing and directing the business and may include executive officers or senior managers, such as CEO, CFO, COO, Managing Member, General Partner, President, Vice President, or Treasurer.
beneficial owner refers to the natural person(s) who ultimately own(s) or control(s) a customer and/or the natural person on whose behalf a transaction is being conducted. It also includes those persons who exercise ultimate effective control over a legal person or arrangement.
Register and log in to eCitizen (www.ecitizen.go.ke). Select Ministry of Lands and Physical Planning. Choose the land search option, enter the title deed number, and pay the fee. Download and review the search results to confirm ownership details.
With respect to the requirement to obtain beneficial ownership information, financial institutions will have to identify and verify the identity of any individual who owns 25 percent or more of a legal entity, and an individual who controls the legal entity.
A beneficial owner of a reporting company is defined as any individual who, directly or indirectly, either exercises substantial control over the reporting company or owns or controls at least 25 percent of the ownership interests of the reporting company.
A beneficiary of trust is the individual or group of individuals for whom a trust was created. The person who creates a trust also determines the trust beneficiary and appoints a trustee to manage the trust in the beneficiary's best interests.