How to identify the Ultimate Beneficial Owner (UBO)?
In most countries, legislation defines a beneficial owner as a person who directly or indirectly controls more than a quarter of a company's share capital.
Identification of such a person (UBO) is a prerequisite for the merchant to start working and accept payments. An integrated approach is recommended to identify the beneficial owner, including:
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In cases where the above methods do not allow determining the UBO, the beneficial owner is automatically recognized as the sole executive body, for example, the CEO, president or chairman of the management board, depending on the organizational and legal form and management structure of the legal entity.
If no direct beneficiary has been identified and none of the shareholders owns a 25% or more stake, it is necessary to identify the person with the largest stake or who has a significant impact on the company's operations with comparable ownership shares.
An example of identifying the beneficial owner:
Beneficiary X controls 78% of shares of LLC Example-1, which, in turn, owns 42% of shares of LLC Example-2. Is Beneficiary X the ultimate beneficiary of LLC Example-2?
Let's calculate his indirect participation in the capital: 0.78 * 0.42 = 0.3276. Therefore, he is recognized as a beneficiary and is subject to identification.
For greater clarity, with the participation of several companies, it is recommended to visualize the ownership structure of shares in the form of a diagram, which will facilitate the understanding and identification of the final beneficiary.
