ECSH63200 - Regulation 5 - Meaning of a beneficial owner: bodies corporate or partnership

Category Heading	Description
The Law	https://www.legislation.gov.uk/uksi/2017/692/regulation/5
What it means	Any individual who holds more than 25% of the shares or voting rights of a limited company or limited liability partnership, or an individual who controls (or exercises ultimate control), is deemed to be a ‘beneficial owner’.   For partnerships (other than a limited liability partnership), a beneficial owner is an individual who ultimately is entitled to, or controls more than 25% share of the capital/ profits or voting rights of the partnership, or otherwise exercises ultimate control over the management of the partnership.
Purpose	To clarify the definition of a ‘beneficial owner’ in a corporate body or partnership.
Time Line	This was outlined under Regulation 6 of MLR2007.
What to establish	Are there any individuals (or other businesses) showing as ‘Persons with Significant Control’ on Companies House? Companies House will show any beneficial owners under ‘Persons with Significant Control’ and show if they have more than 25% of shares and or voting rights. FAME can also establish the exact % of shares an individual hold in the corporate body. Any person with more than 25% shares or voting rights is a beneficial owner.
	Have all identified beneficial owners/ persons with significant control been declared to HMRC and updated on their latest registration?
	If there is a business that owns or controls the business you are reviewing, is there an ‘ultimate beneficial owner’? If there is a chain of companies that own the business you are reviewing, all beneficial owners of the companies with significant control are also classed as beneficial owners of the business through this indirect control. The ‘ultimate beneficial owner’ will be the individual(s) that are shown as beneficial owners/ person with significant control in the company at the top of the chain (usually a parent/umbrella or holding company)
How to test compliance and evidence to obtain	A check against Companies House records or FAME records for a company can be done and compared with the latest registration details HMRC holds to ensure the business has declared all of its beneficial owners to HMRC, including ultimate beneficial owners from any holding or parent company.
	Any changes to the beneficial owners (and any other BOOM/responsible person) must be reported to HMRC within 30 days from the change.
Best Practice	The definition of a beneficial owner is an individual who holds more than 25% of shares or voting rights. Therefore, an individual who holds exactly 25% (or less) of the shares or voting rights does not meet the definition of a beneficial owner/ responsible person.
	If another company is listed as a person with significant control on Companies House (for example a holding or parent company), we must establish who the ‘ultimate beneficial owner’ is. The persons with significant control/ beneficial owners of these companies would also be beneficial owners of the corporate body in question. Some businesses may be parts of a larger company network which has multiple ‘layers’ or companies in which case we would look at the beneficial owners of all companies going up the group; and any beneficial owners be declared to HMRC.
	If a company has an overseas company as a person with significant control, it may be useful to search for the overseas company on ‘Open Corporates’ which may give further information on them.
AMP	No additional Best Practice.
ASP	No additional Best Practice.
EAB	No additional Best Practice.
LAB	No additional Best Practice.
HVD	No additional Best Practice.
MSB	No additional Best Practice.
TCSP	No additional Best Practice.
Further Reading
FAQs	If a person holds exactly 25% of shares or voting rights are they a beneficial owner?   A- No, the shares/ voting rights must be more than 25%.