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An ultimate beneficial owner, or UBO, is the real person who ultimately owns or controls a company, as distinct from any intermediate companies in the ownership chain. The usual threshold is an individual who owns or controls more than 25% of the shares or voting rights, or who otherwise exercises control. Identifying the UBO answers the question: who really benefits from, and stands behind, this business?
- Who it is
- The natural person at the top of the ownership or control chain.
- Common threshold
- More than 25% of shares or voting rights, or equivalent control.
- Why it is identified
- To meet anti-money-laundering rules and know who a lender is dealing with.
Why UBOs are identified
Companies can be owned through layers of other companies, which can obscure who is really in control. Anti-money-laundering rules require a lender to look through that structure to the individuals at the top. Identifying and verifying the UBO prevents the financial system being used behind a corporate screen, and is a standard part of onboarding a business borrower.
UBOs and the public record
In the UK, companies must record people with significant control on the register at Companies House, which overlaps closely with the concept of a UBO. A lender will typically use that record alongside its own verification to establish and confirm who ultimately owns or controls a prospective borrower.
UBOs and Credit Corp
Credit Corp identifies and verifies the ultimate beneficial owners of the UK limited companies and LLPs it lends to, as part of its know-your-customer and anti-money-laundering checks. Credit Corp is an independent UK lender (Company No. 17338274, ICO ZC189608).
See also
- KYC — knowing and verifying your customer.
- AML — the anti-money-laundering framework.
- Politically exposed person — a higher-risk individual.
- Companies House — where people with significant control are recorded.
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