Who is a beneficial owner
An individual who ultimately owns or controls the entity. The usual test is ownership of 25% or more, directly or through other entities, plus anyone who controls the entity by other means, such as the power to appoint directors or a trustee.
Companies
- Pull the ASIC extract and list the shareholders.
- For each corporate shareholder, go up a level until you reach individuals.
- Identify and verify every individual at 25% or more, and the directors who control it.
Trusts
Identify the trustee (and its beneficial owners if corporate), the settlor where relevant, the appointor, and the beneficiaries or classes of beneficiaries named in the deed. Verify the individuals who control the trust.
When you cannot work it out
Layered structures, foreign entities and nominees are red flags. Record what you found and could not find. If ownership cannot be established, treat the client as high risk and consider whether to provide the service at all.
Questions people ask
- The company has four equal shareholders. Who do I verify?
- All four: each owns 25%. Plus any director who is not a shareholder if they control the company.
- Does a discretionary trust have beneficial owners?
- Yes. The trustee and appointor control it, and the classes of beneficiaries must be identified from the deed even if individual beneficiaries are not fixed.
This guide is general information for accountants, bookkeepers, BAS agents, not legal advice. Check AUSTRAC's current guidance for your situation.