Primer / Why beneficial ownership is a useful concept

Why beneficial ownership is a useful concept

People can be involved in a number of companies and in different ways. By limiting our understanding of people’s involvement to ownership only, we would miss instances like below.

Person A controls 60% of Company 2. And Person A owns 50% of Company 3

The person both controls Company 1 and owns half of Company 2. This could be important to know if both companies bid for the same government contract, or if they both appeared in a procurement chain.

It might be equally important to see that a person’s control over a company is greater than one might expect given their financial stake in it.

Person C controls 60% of votes in Company 2 while owning only 20% of its stock.

Uniting ownership and control under the banner of beneficial ownership allows us to represent the complex reality of corporate structures, and the multiple interests a person might have in a company.