For corporate clients, the hard question isn’t whether the company is real — it’s who actually controls it. Here’s how to work through the structure and spot deliberate opacity.
Quick answer
The ultimate beneficial owner (UBO) is the real person who ultimately owns or controls a company — not the company or nominee whose name is on the paperwork. Finding them means working through the ownership chain, and where someone is deliberately hiding it, watching for red flags: layered offshore structures, nominee shareholders and directors, “there is no beneficial owner” claims, and inconsistent records. The widely-used 25% ownership threshold is only a starting point — control can exist without it.
For corporate clients, the hardest question in onboarding isn’t “is this company real?” — it’s “who actually controls it, and are they trying to stay hidden?” A corporate client can look completely orderly on paper while hiding risk in ownership chains, delegated control, group structures and transaction logic.[1] This guide is about reading those structures — and spotting when someone doesn’t want to be found.
This is a technical area where firms must apply their own judgement and follow their supervisor’s guidance. The material below describes how practitioners and regulators approach UBO identification; it is not a substitute for your firm’s policies or professional advice.
What a UBO actually is
A UBO is the individual who ultimately owns or controls a legal entity — through direct or indirect ownership of a sufficient share of the equity or voting rights, or through control by other means.[2] The crucial phrase is “or through control by other means”: someone can control a company without appearing to own much of it at all. Shares may be registered to a holding company, a nominee, or a trust — but the UBO is the person who ultimately controls or profits.[3]
Why the 25% threshold is only a starting point
Many compliance teams begin with the familiar 25% ownership threshold — but that figure is only a starting point, not the whole test.[4] Control can sit below 25% (through voting agreements, board control, or influence), and a structure can be deliberately arranged so no single person crosses the line on paper. Treating 25% as the finish line is exactly the mistake sophisticated structures are built to exploit. FATF Recommendation 24 underpins the global requirement to identify and verify beneficial ownership precisely because ownership can be obscured.[5]
How to work through an ownership chain
- Confirm the entity itself — legal registration, registered address, and that it actually exists and operates.
- Map the ownership layers — shareholders, holding companies, and where each is registered.
- Follow the chain to natural persons — keep going until you reach real people, not more companies.
- Test control as well as ownership — who makes decisions, holds voting rights, or exerts influence.
- Verify the individuals you identify, and screen them for sanctions, PEP status and adverse media.
Defensibility usually hinges on whether you can show you took reasonable steps, applied the correct threshold, and tested control as well as ownership.[1]
Red flags that someone is hiding the UBO
Warning signs in corporate ownership
Multiple layers of ownership involving offshore entities, trusts or shell companies across low-transparency jurisdictions · nominee shareholders or directors who appear to have no real connection to the business · UBOs who are very junior or lack the means to have invested · repeated reliance on intermediaries to avoid direct disclosure · frequent unexplained changes of directors or shareholders · inconsistent or missing corporate records · a claim that there is ‘no beneficial owner’.
On that last point: corporate clients sometimes state there is no beneficial owner, or that it’s a fund, trust or widely-held entity. Sometimes that’s accurate — but it’s also a frequent cover for weak governance or deliberate opacity. If a client is genuinely unable to identify a natural person with ownership or control, the analysis must be explicit and supported, including who the controlling persons are and why.[1]
Nominees, shells and layering
Two structures deserve special attention. Nominee arrangements separate legal ownership from real control — a nominee is the legal owner on paper but doesn’t actually control the asset; scrutinise the relationship and run KYC on both the nominee and the entity.[5] Shell companies (little or no real operations) have legitimate uses, but layered shells across opaque jurisdictions are a classic way to obscure ownership.[6]
A layered structure is not automatically suspicious — many legitimate groups have them. The task is to spot inconsistency: where the structure doesn’t match the stated business activity, or complexity has no commercial logic.
The jurisdiction problem
Some jurisdictions simply don’t publish records of directors and shareholders, making a UBO far harder to uncover. Knowledge of what data is actually available in a given jurisdiction is key to finding useful information from other sources — and weak-transparency jurisdictions themselves raise the risk level and may warrant enhanced due diligence.[7]
Add expert quote before publishing
“The goal with a corporate client isn’t to collect more files — it’s to spot the inconsistency early. A structure that’s complex for no commercial reason, a director with no connection to the business, an owner who couldn’t have funded their stake: those are the threads worth pulling, and the ones a paperwork-only check walks straight past.”
— Suggested placeholder for a quote from Osman Ismail (founder input, OnBoardNow / DPS Software). Replace with a real, approved quote, or remove.
Making it practical without creating a bottleneck
- Map the structure visually — ownership graphs make complex chains interpretable at a glance.
- Pull from registries where they exist — but know their limits by jurisdiction.
- Focus scrutiny on the people who genuinely matter — the natural persons with real ownership or control.
- Document your reasoning, especially where a UBO can’t be cleanly identified.
- Ask the closing question: if this client behaves differently to what they’ve told us, will our monitoring detect it quickly enough to act?[1]
Key takeaway
Finding the UBO isn’t about paperwork — it’s about following control to a real person and noticing when someone doesn’t want you to. Treat 25% as a starting point, test control as well as ownership, and document your reasoning — especially when the honest answer is ‘the structure is designed to make this hard’.
Bring structure and evidence to corporate onboarding
OnBoardNow helps you collect corporate information, verify the individuals who matter, and screen them against sanctions and PEP lists — keeping a documented, defensible record of how you identified the beneficial owners. Book a demo.Book a demo →
Frequently asked questions
What is a UBO?
The ultimate beneficial owner — the natural person who ultimately owns or controls a legal entity, whether through ownership, voting rights, or control by other means, even if shares are held via a company, nominee or trust.
Is the 25% threshold the definitive test for a UBO?
No. It’s a widely-used starting point, but control can exist below 25% and structures can be arranged to avoid it. You must test control as well as ownership.
What are the red flags for hidden beneficial ownership?
Layered offshore/shell structures, nominee shareholders or directors with no real connection to the business, owners who couldn’t have funded their stake, inconsistent records, frequent unexplained ownership changes, and ‘no beneficial owner’ claims.
What if I genuinely can’t identify a UBO?
Your analysis must be explicit and supported — identifying the controlling persons and why a natural-person owner can’t be established — and you should apply enhanced scrutiny. If you can’t get comfortable, consider whether to proceed.
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