As part of your client due diligence requirements you will need to identify who the beneficial owners within the business are. A Beneficial owner is defined as:
A sole practitioner;
A partner, or LLP member, in a firm who:
- holds (directly and indirectly) more than 25% of the capital, or profits or voting rights; or
- exercises ultimate control; and
A shareholder in a limited company who:
- holds (directly and indirectly) more than 25% of the shares or voting rights; or
- ultimately owns or exercises ultimate control.
If your client has a large business, there may be several beneficial owners. You may use your current electronic verification software systems to identify who the individuals are. You can also check additional information such as company structure, Companies House and other information you have obtained directly from your client.
In addition to this, you are required to check if the clients are PEPs (domestic and overseas), as well as family members and known close associates.
Section 5.1.17 of The CCAB Guidance also has further guidance on complex structures of beneficial ownership.