Ultimate Beneficial Owner (UBO)
In UK legislation, an Ultimate Beneficial Owner (UBO) refers to the individual(s) who ultimately own or control a legal entity, such as a company, trust, or partnership. UBOs play a critical role in enforcing anti-money laundering (AML) and counter-terrorism financing (CTF) regulations. Identifying the UBO and Significant Controller of an entity is crucial to prevent illicit activities like money laundering and tax evasion, and it helps ensure corporate transparency.
Updated Legislation and Key Steps to Identifying a Beneficial Owner:
- Direct Ownership Disclosure: Companies in the UK must maintain a People with Significant Control (PSC) register. This includes individuals who directly or indirectly own or control more than 25% of the company’s shares or voting rights, meeting the threshold for a UBO or Significant Controller. This is in line with the UK’s Money Laundering Regulations 2017 and subsequent updates.
- Indirect Ownership Identification: In more complex corporate structures, it’s essential to trace ownership through layers of entities to determine the ultimate beneficial owner. This is particularly important when ownership is spread across multiple jurisdictions or through corporate vehicles.
- Due Diligence Checks: Financial institutions and regulated entities must conduct due diligence under UK law. This includes verifying the identity of the UBO using official documents, public registers, and understanding the ownership structure. This is part of the enhanced obligations under the UK’s Money Laundering and Terrorist Financing (Amendment) Regulations 2019.
- Beneficial Ownership Registers: The UK has created public beneficial ownership registers for companies, Limited Liability Partnerships (LLPs), and certain trusts, requiring companies to submit information about their UBOs. The public can access these registers, increasing transparency and accountability.
- Regulatory Compliance and Updates: Ongoing compliance with UK AML regulations requires businesses to keep UBO information up to date. Companies must ensure they regularly review and update their records to stay compliant with evolving UK financial regulations, including the Economic Crime (Transparency and Enforcement) Act 2022.
Identifying UBOs and Significant Controllers is vital in promoting transparency, corporate responsibility, and ensuring compliance with the UK’s financial and anti-corruption laws.
Useful Links:
- UK Government Guidance on People with Significant Control (PSC): Official guidance on maintaining a PSC register and identifying UBOs.
- UK Beneficial Ownership Transparency: Information on the UK’s beneficial ownership register and related regulations.
- HMRC Money Laundering Regulations: Comprehensive guidance on AML laws in the UK.
- Financial Conduct Authority (FCA) AML Guidelines: Guidance on anti-money laundering requirements for businesses operating in the UK.
By ensuring compliance with the latest UBO and Significant Controller legislation, businesses can contribute to corporate transparency and reduce the risk of involvement in financial crime.
« Back to Glossary IndexOur Business Data solution contains a complete copy of the Significant Controllers register as a single dataset with daily refreshes. All data is linked to company number.