Beneficial Owners Identification

What are Beneficial Owners?

The Financial Crimes Enforcement Network ( FinCEN) defines a Beneficial Owner as:
  • Each individual, if any, who, directly or indirectly, owns 25% or more of the equity interests of a legal entity customer (i.e., the ownership prong); and
  • A single individual with significant responsibility to control, manage, or direct a legal entity customer, including an executive officer or senior manager (e.g., a Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, Managing Member, General Partner, President, Vice President, or Treasurer); or any other individual who regularly performs similar functions (i.e., the control prong).

What do you Need to Provide for Individuals or Control Persons?

If any individual owns 25% or has rights to own, we require the following documents via the beneficial owner section of the platform:

  1. A copy of valid government issued ID (driver’s license or passport).
  2. Address verification (mail item within the last 90 days that lists the individual and the address provided) if address is not listed on ID.

What do you Need to Provide for Entities?

If any entity owns 25% or more, we require the following documents via the beneficial owner section of the platform:
  1. A copy of the company’s official formation or organizational document, such as the articles of incorporation, certificate of formation, government issued business license, a partnership agreement, offering memorandum or trust instrument, as applicable.
  2. Proof of beneficial ownership of the company evidencing those entities or individuals owning 25% or more, such as an operating agreement, partnership agreement, share registry, capitalization table, or Schedule K
  3. If any individual owns, or has the rights to own, 25% of more of this entity please add them as individuals via the beneficial owners section & provide the following for each beneficial owner:
    1. A copy of valid government issued ID (passport/visa/driver’s license).
    2. Address verification (mail item within the last 90 days that lists the individual and the address provided) if address is not listed on ID.

Why do we Need this Information?

We need it in order to comply with various regulatory obligations for both KYC and AML.

Appendix: Example Legal Entity Customers with Complex Ownership structure

Collection of Beneficial Ownership Information for Direct and Indirect Owners
RealBlocks is required to obtain from entity customers the identities of individuals (beneficial owners), either directly or indirectly through multiple corporate structures, as illustrated in the following example. The following is provided as guidance to assist you in providing the required beneficial holder disclosure on this form.
Based on the diagram below, Allan is a beneficial owner of Customer because he owns indirectly 30 percent of its equity interests through his direct ownership of Company A. Betty is also a beneficial owner of Customer because she owns indirectly 20 percent of its equity interests through her direct ownership of Company A plus 16 2/3 percent through Company B for a total of indirect ownership interest of 36 2/3 percent. Neither Carl nor Diane is a beneficial owner because each owns indirectly only 16 2/3 percent of Customer’s equity interests through their direct ownership of Company B.
“Beneficial Owners” are: (1) Each individual, if any, who owns, directly or indirectly, 25 percent or more of the equity interests of the legal entity customer (e.g., each natural person that owns 25 percent or more of the shares of a corporation; and (2) An individual with significant responsibility for managing the legal entity customer (e.g., a Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, Managing Member, General Partner, President, Vice President, or Treasurer).

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