---
title: "Beneficial owner"
description: "The individual who ultimately owns or controls a legal entity — identified and verified during KYB under FinCEN’s due-diligence rules."
reviewedBy: "Krisan Nichani, Chief Compliance Officer"
updated: "July 2026"
canonical: "https://infinite.net/learn/glossary/beneficial-owner"
---

# Beneficial owner

A beneficial owner is the individual who ultimately owns or controls a legal entity, even through layers of holding companies — also called the ultimate beneficial owner (UBO). Under FinCEN’s Customer Due Diligence rule, institutions identify and verify beneficial owners when onboarding business customers — generally individuals holding 25% or more of the entity, plus a person with significant control.

Beneficial ownership is where entity onboarding gets hard: ownership must be traced down through every layer to actual people, each of whom is verified and screened against sanctions and watchlists. Layered or cross-border structures are exactly where reviews stall — every layer adds documents, and every institution traditionally starts the tracing from scratch.

Infinite runs that work once, to network standard: KYB with beneficial-owner identification and screening happens at onboarding, and a counterparty vetted on the network is vetted for every participant — which is why first-time review moves from roughly 30 days to 1–2.

## Frequently asked questions

### What ownership percentage makes someone a beneficial owner?

Under FinCEN’s Customer Due Diligence rule, generally individuals holding 25% or more of the entity, plus at least one individual with significant managerial control. Institutions may apply lower thresholds on a risk basis. [Know Your Business (KYB)](https://infinite.net/learn/glossary/know-your-business.md)

### Is a beneficial owner the same as the legal owner?

Not always. The legal (registered) owner is whoever holds title on paper — which can be a holding company or nominee. The beneficial owner is the natural person behind them who ultimately owns or controls the entity, which is why KYB traces ownership through every layer.

### Why do banks ask for beneficial owners?

Because entity-level screening only works if the people behind the entity are known: sanctions and watchlist checks apply to the individuals who ultimately own or control it, not just the company name. [Sanctions screening](https://infinite.net/learn/glossary/sanctions-screening.md)

## Where it fits on Infinite

- [Embedded Compliance](https://infinite.net/compliance/embedded)
- [Third-party funds flow](https://infinite.net/funds-flow/third-party)
- [Stablecoin compliance](https://infinite.net/use-cases/global-compliance)

## See also

- [Know Your Business (KYB)](https://infinite.net/learn/glossary/know-your-business.md)
- [Know Your Customer (KYC)](https://infinite.net/learn/glossary/know-your-customer.md)
- [Enhanced due diligence (EDD)](https://infinite.net/learn/glossary/enhanced-due-diligence.md)