Who is a beneficial owner?

The Act on Money Laundering defines beneficial owner as a person who either owns a company or otherwise exercises control over the company. Those who meet any of the following requirements are considered as beneficial owners:

  • The person owns more than 25 percent of the company shares directly or indirectly through another company.
  • The person holds more than 25 percent of the voting rights in the company directly or indirectly through another company.
  • The person exercises actual control over the company or organisation on other grounds. Other grounds may refer to a partnership agreement, for example.

Most companies only have like-kind shares and in these cases, the allocation of both shares and number of votes is always the same. However, if the company has shares of different kinds, the persons who hold more than 25 percent of the number of votes are beneficial owners.

In a company, there can be none, one, or several beneficial owners who meet the requirements above.

Companies are each responsible for identifying their beneficial owners. The PRH will not determine the beneficial owners of any company or organisation.

Please note that the company must file a notification of beneficial owners even if the company has no beneficial owners meeting these requirements or the company does not know them.

In these cases, the PRH will, in accordance with the Act on Money Laundering, record in the Trade Register that the board, the general partners, the managing director, or any other person in a corresponding position are actual beneficial owners.

Who are beneficial owners when a company is owned by another company?

If a company is owned by other companies, read the following to find out its beneficial owners:

  1. Does someone in the owner company exercise independent power of decision?
  2. Does the person exercising independent power of decision have more than 25 percent of the number of votes in the company owned?

In a limited liability company, the person exercising independent power of decision is, for example, a majority shareholder (a person who holds more than 50 percent of the shares or the number of votes). In a general partnership, it is the partners and in a limited partnership, the general partners who usually exercise independent power of decision.

If there is no one exercising independent power of decision in the owner company, the company owned must file that it has no beneficial owners.

The person who exercises independent power of decision has a number of votes equivalent to the share of ownership in the whole owner company. If the person’s number of votes is more than 25 percent of the company owned, the person is a beneficial owner of that company.

The person who exercises independent power of decision can also own shares of the company directly or through a third company. In this case, the numbers of votes from all ownerships are added up.

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Latest update 01.07.2019