What is a beneficial owner and why do I need to provide this information?

A beneficial owner is an individual, who holds 25% or more equity ownership of your business. If your business is a sole proprietorship, the beneficial owner is the owner.  If there is a partnership, corporation, or LLC in which anyone holds more than 25% ownership, they are considered a beneficial owner.

To help the government fight financial crime, Federal regulations require that financial institutions to obtain, verify, and record information about the beneficial owners of legal entity customers. Legal entities can be abused to disguise involvement in terrorist financing, money laundering, tax evasion, corruption, fraud, and other financial crimes. Requiring the disclosure of key individuals who own a legal entity (i.e., the beneficial owners) helps law enforcement investigate and prosecute these crimes.