What is the difference between a controlling person and a beneficial owner?

Asked by: Ms. Veronica Cummerata  |  Last update: July 21, 2025
Score: 4.5/5 (41 votes)

A controlling person: defined as an individual who has significant responsibility for managing the business/legal entity (e.g. CEO, CFO, Treasurer, etc.). Each beneficial owner: all those who directly or indirectly own a 25% stake or higher in the business/legal entity.

Can a beneficial owner be a controller?

Beneficial owner, concerning a company or LLP, means:

any individual who owns or controls (directly or indirectly), whether through bearer shareholdings or other methods, more than 25% of the company's or LLP's shares or voting rights; any person who controls the company or LLP, or.

What is the difference between beneficial owner and person with significant control?

Persons of Significant Control (PSC) and Ultimate Beneficial Owners are often the same person but on occasion, they can be different. A PSC holds the right to significant control over a company and the appointment of directors. A PSC is defined at the individual who: owns more than 25% of the company's shares.

Who is a controlling person in a company?

For a corporation, a Controlling Person may include a director, senior management and any natural person who holds, directly or indirectly, more than 25 percent of the shares or voting rights of an entity as a beneficial owner.

What is the difference between ownership and control?

The position of the owner has been reduced to that of having a set of legal and factual interests in the enterprise while the group which we have called control, are in the position of having legal and factual powers over it.

Beneficial Ownership vs. Control: Navigating the Nuances in AML Compliance

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Why separate ownership and control?

The separation allows owners to focus on investing and generating returns while managers focus on running the company and maximize its value. The ownership can be transferred to another share holder without disturbing the operations of the corporation.

What is the role of a control owner?

A control owner is accountable for implementing and maintaining the effectiveness of specific controls as recorded in a risk register, in a position description or in organisational policies and procedures. Control owners may also be responsible for designing or modifying controls to improve their effectiveness.

Is a controlling person a beneficial owner?

This definition tells us that the terms “beneficial owner” and “controlling person” aren't mutually exclusive—a controlling person is a subcategory of a beneficial owner.

What is the difference between beneficial owner and controlling party?

Beneficial owners are: any natural person having an equity ownership interest of 25% or more in a legal entity customer; and. any control person (defined as an individual having significant responsibility for controlling, managing, or directing the legal entity customer).

What is the difference between ultimate beneficial owner and controlling person?

A person of significant control has direct or indirect influence on the running of a company; an ultimate beneficial owner has direct or indirect ownership of a company but doesn't necessarily have influence over it.

What is the difference between beneficial owner and controlling manager?

A controlling person: defined as an individual who has significant responsibility for managing the business/legal entity (e.g. CEO, CFO, Treasurer, etc.). Each beneficial owner: all those who directly or indirectly own a 25% stake or higher in the business/legal entity.

Who is considered a beneficial owner?

A beneficial owner of a reporting company (as any entity required to file a BOI report is called) is defined as any individual who, directly or indirectly, either exercises substantial control over a reporting company or owns or controls at least 25 percent of the reporting company's ownership interests.

What are the two prongs for identifying a beneficial owner?

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.

What is a legal owner but not a beneficial owner?

The owner at law may not be the same person as the beneficial owner. A beneficial owner is a person entitled to the benefit of the land and on their death the equitable interest may not pass in the same way as the legal ownership does.

Can there be two beneficial owners?

A legal entity may have multiple “beneficial owners,” this form requires you to list only those that own 25% or more (up to five) under each of the two prongs of the definition above. If appropriate, the same individuals may be listed under both prongs.

What is the ultimate beneficial owner rule?

While jurisdictions may interpret the specifics of this definition differently, it is commonly agreed that an ultimate beneficial owner or UBO owns more than 25% of a company's shares, or controls more than 25% of the voting rights. However, determining the UBO of a company is not always a straightforward task.

What is the difference between significant controller and beneficial owner?

A person with significant control ( PSC ) is someone who owns or controls your company. They're sometimes called 'beneficial owners'. You must identify your PSC and tell us who they are. This might be you, or someone associated with your company.

What is Fincen controlling person?

Owner or Controlling Person - An owner or controlling person includes the following: MSB. Owner or Controlling Person. Sole Proprietorship.............. the individual who owns the business.

What is a controlling person of an entity?

“Controlling Person” This is a natural person who exercises control over an entity. Where that entity is treated as a Passive Non- Financial Entity (“NFE”) then a Financial Institution must determine whether such Controlling Persons are Reportable Persons.

Who is considered a controlling person?

A controlling person may exhibit extreme jealousy, frequently accuse their partner of infidelity, or attempt to control their interactions with others. They may even put their partner under surveillance, monitoring phone calls, texts, or emails without consent – or after pressing them for consent.

Who is exempt from the beneficial ownership rule?

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.

How do you outsmart a controlling person?

Communicate
  1. using “I” statements, such as “I feel hurt,” to speak in a way that reduces feelings of blame.
  2. discussing ways to divide responsibilities or share control.
  3. offering alternative courses of action to replace the behavior, such as making plans together rather than the person making plans for them.

What is a control person in an LLC?

A person is presumed to control a limited liability company (“LLC”) if the person: (i) directly or indirectly has the right to vote 25 percent or more of a class of the interests of the LLC; (ii) has the right to receive upon dissolution, or has contributed, 25 percent or more of the capital of the LLC; or (iii) is an ...

Who is the controlling owner?

Controlling Owner(s) means any person(s) or domestic entity, along with sub entities or person(s), owning more than a 25% interest in the business applying for the license.

What is a control person in a business?

A control person is an entity or individual who has the power to influence, direct, or control the activities of a publicly traded company.