Beneficial Ownership

Whether you’ve just launched a start-up or you own an established business, beneficial ownership is an important concept for any entrepreneur to understand and apply. To understand if the rules of beneficial ownership apply to your business, dive into our breakdown of what beneficial ownership is, why it is important, and how Landmark National Bank handles it.

What is beneficial ownership?

A beneficial owner is defined as an individual who owns, directly or indirectly, 25% or more of the equity interests or corporate shares of the legal entity customer. Additionally, any controlling person with significant responsibility for managing the legal entity customer is also considered a beneficial owner. Common roles for controlling persons include:

Chief Executive Officer
Chief Financial Officer
Chief Operating Officer
Managing Member
General Partner
President
Vice President
Treasurer

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Who is a beneficial owner?

Beneficial ownership describes the act of owning or controlling a legal entity, even if the title of the entity is under another name. A legal entity includes a corporation, limited liability company, general partnerships, or other similar businesses created by filing a public document with a Secretary of State.

Under the Bank Secrecy Act, the Financial Crimes Enforcement Network (FinCEN) created beneficial ownership as a requirement for businesses. By law, all financial institutions must obtain, verify, and record information about the beneficial owners of legal entity customers. Beneficial ownership is designed to help the U.S. government prevent a wide range of financial crimes, including tax evasion, money laundering, and more.

What information do I have to provide?

When opening an account for a legal entity, you will need to provide the following information for each beneficial owner or controlling person:

Name
Primary residence address
Date of birth
Social Security number
Name of the issuer and number of the driver’s license or passport

How does Landmark handle the information?

Any time an account is opened or maintained for a legal entity, we will request information that identifies the ultimate beneficial owner(s) and controlling person of the legal entity. This information is collected whether or not the person identified is a Landmark National Bank customer.

While we understand the information requested is personal and sensitive, we need to obtain this information in order to comply with the law. As always, we will treat all information collected with the utmost care. All information collected by Landmark is securely stored and handled in accordance with our strict privacy policies.

Why is beneficial ownership important?

In addition to helping federal law enforcement hinder financial crimes, beneficial ownership helps companies maintain legal transparency, minimize conflict of interests, and ensure their operations comply with anti-corruption requirements.