What is Beneficial Ownership? Definition, requirements, and how it applies to your business formation. Learn everything about beneficial ownership for LLCs and corporations.
# Beneficial Ownership
Beneficial ownership refers to the natural persons who ultimately own or control a legal entity, regardless of whose name appears on official documents. Under the Corporate Transparency Act, beneficial owners are individuals who own 25% or more of a company's equity interests or who exercise substantial control over the company (such as senior officers or directors).
The concept exists to prevent the use of shell companies for money laundering, tax evasion, and terrorism financing. FinCEN's Beneficial Ownership Information (BOI) reporting requirement makes this information available to law enforcement while keeping it confidential from the public.
Lovie automatically identifies beneficial owners during formation and files the required BOI report with FinCEN, ensuring compliance with the Corporate Transparency Act.