---
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: "2026-07"
canonical: "https://infinite.net/resources/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 (infinite.net) 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/resources/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/resources/learn/glossary/sanctions-screening.md)

## Where it fits on Infinite

- [Embedded Compliance](https://infinite.net/agents/embedded-compliance)
- [Third-party funds flow](https://infinite.net/resources/funds-flow/third-party)
- [Stablecoin compliance](https://infinite.net/solutions/embedded)

## See also

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

Last updated July 2026