When you own stock in a company, you are considered a shareholder. Shareholders are typically classified as either beneficial or registered owners.
Beneficial owners have their stock registered in a nominee account, while registered owners are those whose names appear on the company's share register.
If you're not sure if you're a beneficial owner, there are a few ways to find out.
How to Find Out if You're a Beneficial Owner
What is a beneficial owner?
A beneficial owner is someone who derives a financial or another benefit from a company or other entity but is not the legal owner of that company or entity.
The beneficial owner may be the actual owner of the company but may also be someone else who benefits from the company's activities.
For example, a beneficial owner might be someone who owns shares in a company but does not have voting rights or control over the company.
Beneficial owners are often essential to track for tax reasons and to prevent money laundering.
Find out if you're a beneficial owner
If you're not sure, you're not alone. A beneficial owner is a person who ultimately benefits from a company's assets and operations. They may or may not be the company's owners, but they have more control over the company than anyone else.
If you want to find out if you're a beneficial owner, you can do a few things.
The first step is to look at your ownership stake in the company. If you have more than 25% of the voting shares, you're considered a beneficial owner.
You can also check if you control the company's decisions or operations. If you do, then you're likely a beneficial owner as well.
Methods of ascertaining beneficial ownership
Several methods can be used to ascertain beneficial ownership.
One is to look at the company's corporate structure and identify who holds the shares.
Another is to review the company's public filings and look for any clues about beneficial ownership.
A third method is to conduct due diligence on the company and its shareholders. This may involve reviewing bank records, property records, and other documentation.
Finally, it may be necessary to speak with company representatives or shareholders to obtain information about beneficial ownership.
What to do if you are a beneficial owner
If you are a beneficial company owner, you should do a few things to protect your interests.
First, make sure you have a durable power of attorney in place. This will allow someone else to make decisions on your behalf if you cannot do so yourself.
You should also keep current on the company's financials and any changes in management or ownership. If you notice anything that concerns you, contact the company's leadership or board of directors for more information.
Finally, remember to keep track of your shares in the company and any communications related to them. This will help ensure that you are always up-to-date on what is happening with your investment.
Conclusion
If you're unsure if you're a beneficial owner or not, it's best to consult with an attorney or tax professional. They can help you determine if you need further measures to protect your interests.
And remember, the earlier you find out and take action, the better.