Glossary
What Is a UBO (Ultimate Beneficial Owner)?
A company can sign a contract, but a company cannot be a money launderer. That is the idea behind the ultimate beneficial owner, or UBO: the real person standing behind a legal entity. This guide explains how EU law defines a UBO, the ownership threshold that triggers it, and why onboarding a company means identifying people, not just a registered name.
- A UBO is the real person who owns or controls a company
- More than a quarter ownership, directly or indirectly, is the usual trigger
- A control test catches ownership hidden below that threshold
What does UBO actually mean
Ultimate beneficial owner, UBO, means the natural person, or persons, who ultimately own or control a legal entity, even when the entity's registered ownership shows a different company, a trust, or a chain of holding structures instead. The word ultimate matters: if company A is owned by company B, which is owned by company C, the UBO is the human being at the end of that chain, not company B or C. Every company, no matter how it is structured, is required to have at least one identifiable UBO under EU law, and if genuinely none can be found, the entity's senior managing official is treated as the UBO instead.
What is the ownership threshold
Under Article 3(6)(a) of Directive (EU) 2015/849, a natural person is treated as a beneficial owner where they hold, directly, more than a quarter of the shares or voting rights, or hold an indirect ownership interest above that same level through another entity they control. Indirect ownership is calculated by multiplying the stake at each link in a chain of entities. A shareholder just under that line is not automatically excluded; it is a trigger for closer identification, not a hard cutoff below which nobody is ever a beneficial owner.
What is the control-by-other-means test
Ownership share is not the only route to being a UBO. Someone who controls a company through other means, a shareholders' agreement, the right to appoint or remove most of the board, veto rights over key decisions, or another mechanism that gives them effective control without a matching shareholding, is still a beneficial owner under the same rules. This test exists because ownership and control do not always line up. A person can hold a small stake on paper while actually running the company, and the rules are written to catch that person too, not just whoever appears on the share register.
What happens when a company has no clear UBO
Some structures are deliberately layered, or ownership is spread thinly enough that nobody crosses the threshold. When reasonable efforts to identify a beneficial owner through ownership or control are exhausted without a result, the entity's senior managing official, a director or equivalent, is recorded as the beneficial owner of last resort. That is a fallback, not a way to avoid the question. A firm relying on it should be able to show what it actually tried before reaching that conclusion, since regulators treat an unexamined fallback very differently from a documented one.
Why it matters when onboarding a client
Onboarding a company client without asking who stands behind it collects a registered name and address, and nothing that actually identifies a person a firm could be dealing with unknowingly. A UBO declaration, collected as part of the same intake as the engagement letter, turns company onboarding into people onboarding: naming the individuals who own or control the client, so identity checks and sanctions screening have someone specific to run against, rather than a legal entity with no human behind it in the file.
In Braigest
Collect the UBO declaration in the same flow as the company check
Company registry lookups and a beneficial-owner declaration run as steps in the same onboarding link, feeding the same case, available from Practice at €149 a month.
Frequently asked questions
What share of ownership makes someone a UBO?
More than a quarter of the shares or voting rights, held directly or indirectly, under Article 3(6)(a) of Directive (EU) 2015/849. Someone with effective control below that level can still qualify through the separate control test.
Can a company have more than one UBO?
Yes. Any number of people can each individually cross the ownership or control threshold, and all of them are recorded as beneficial owners of that same company, not just the largest shareholder.
What if no individual meets the ownership threshold?
The company's senior managing official is recorded as the beneficial owner of last resort, but only after genuine efforts to identify an owner through ownership or control have been exhausted.
Is a UBO declaration the same as a company registry lookup?
No. A registry lookup confirms a company's registered details. A UBO declaration identifies the individuals who actually own or control it, which a registry filing does not always show directly or completely.
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