Ultimate Beneficial Owner refers to the ultimate natural person who controls or owns the legal person whether directly or through a chain of ownership or control or any other indirect means such as the right to appoint or dismiss the majority of the directors from the Board of Directors. This also includes those natural persons on behalf of whom the transactions are being conducted or who exercise ultimate control over a legal person. The Ultimate Beneficial Owner should also be in possession of the following:-
When two or more partners have a joint control over the ratio of capital in a Legal person then they should jointly be considered as owners.
If in case after all means an Ultimate Beneficial Owner cannot be determined or if there is reasonable doubt that the natural person identified as legal person is actually the Ultimate Beneficial Owner then the natural person who controls the legal person by other means shall be considered as the Beneficial Owner; If no such person can be identified then the natural person who holds the position of a higher management official (e.g. CEO or CTO etc.) can be considered as the Beneficial Owner.
Let’s take an example of how to determine a Beneficial Owner:
ABC ltd. has 4 partners each having a shareholding of 25% in the company. In this case all of the partners are Beneficial Owners of the company & each of their details need to be maintained in the UBO register.
In order to register a beneficial owner the legal person must maintain a Beneficial Owner register within 60 days of obtaining a license. The data included within this register should be submitted to the registrar.
An entity is expected to maintain all of the following in its records:
The register of Beneficial Owner maintains the following data for each of the Beneficial Owner’s:
A Register of Partners or Shareholders shall maintain the following data for each of the partners or shareholders: