Beneficial Ownership

Beneficial Ownership

Beneficial ownership information refers to identifying information about the individuals who directly or indirectly own or control a company.

Financial institutions are required to collect identifying information about beneficial owners. The method of collection and exact information that is collected varies slightly between financial institutions. 

What information is collected?

Be prepared to provide identifying information for any individuals (names, addresses, DOB, etc.) or entities (state filed formation documents, etc.) that own a portion of the business. If a business is owned by another entity (business, trust, etc.), then information will be collected on that owning entity as well, until all individuals with ownership have been identified. The goal is to determine the “heartbeat” of the business. 

See below for an example:

• ABC Cannabis LLC is applying for products and services with a financial institution. 
• ABC Cannabis LLC is owned by Sam Jones (25%) and 123 Green Holdings (75%). 
• John Smith (50%) and Jane Smith (50%) are the owners of 123 Green Holdings. 

The financial institution will collect identifying information on ABC Cannabis LLC because they are applying for products and services. Identifying information will also be collected on Sam Jones, 123 Green Holdings, John Smith, and Jane Smith, as they are all considered beneficial owners.