Understanding UBOs

Knowing who really owns or controls a company is not just good business sense, it’s a key requirement under UK Anti-Money Laundering (AML) regulations. In this guide, we’ll break down what a UBO (Ultimate Beneficial Owner) is, why it matters, and how your business can meet AML compliance requirements in a clear, practical way.

What is a UBO (Ultimate Beneficial Owner)?

A UBO is the individual who ultimately owns or controls a company. This is the person pulling the strings behind the scenes, even if they don’t appear on the surface.

In the UK, the Person with Significant Control (PSC) register often aligns with UBO requirements, but they are not always identical. Generally, a UBO is someone who:

Owns more than 25% of the shares or voting rights
Has the right to appoint or remove the majority of directors
Exercises significant influence or control

💡 Flex Tip: Just because a company structure looks complex doesn’t mean it’s illegal. But if it’s designed to hide ownership, that’s a red flag you shouldn’t ignore.

Why Identifying UBOs Matters

Identifying UBOs is a legal requirement under the Money Laundering Regulations 2017 (as amended). It supports:

Effective Customer Due Diligence (CDD)
Enhanced Due Diligence (EDD) for higher-risk clients
Transparent business relationships
Protection against fraud and financial crime

💡 Flex Tip: Always screen UBOs and PSCs against UK sanctions lists to avoid onboarding a designated individual.

Company Structures Explained

Different business types affect how ownership is recorded:

LTDs (Limited Companies): Separate legal identity, common structure, often has PSCs.
PLCs: Publicly traded shares, greater regulatory oversight.
LLPs: Hybrid of a partnership and limited company.
LLCs: Common in the US, ownership lies with members.
CICs and Charities: Must reinvest profits into their social purpose.
Trusts: Involve settlors, trustees, and beneficiaries—all of whom may be UBOs.

💡 Flex Tip: When working with overseas companies or trusts, trace through every layer to identify the real individuals behind the structure.

Using Companies House for UBO Checks

For UK companies, Companies House is a goldmine. You can:

Confirm company status and incorporation date
Review PSCs and directors
Check confirmation statements for shareholder updates

💡 Flex Tip: Follow the company profile to receive email alerts when changes are made to directors or PSCs.

How to Verify UBOs

When verifying ownership, collect:

Confirmation statements with shareholder info
ID documents for individuals with 25%+ shareholding
Shareholder agreements
Declaration of ownership (especially for overseas entities)

If the PSC is another company, keep going until you reach an individual.

Dealing With Overseas Companies

Many jurisdictions don’t have public registers, making it harder to verify ownership.

Request certificates of incorporation and share breakdowns
Use data tools like LexisNexis or D&B to confirm executive roles
Apply Enhanced Due Diligence where transparency is limited

💡 Flex Tip: US companies must report UBOs to FinCEN, but data isn’t public. Always ask for supporting docs.

Sole Traders and Partnerships

Sole traders are both legal and beneficial owners.
Partnerships require documentation from each named partner.

If unsure about who is running the business, don’t be afraid to ask for evidence.

Charities and Trustees

Search the Charity Commission Register to:

View trustee names
Confirm the charity’s status

💡 Flex Tip: Collect ID for at least 3 trustees, including the Chair, for balanced compliance.

What If the Business Isn’t Formed Yet?

Label them as such and ask for intended PSC details.

Post-incorporation, cross-check these details against Companies House.

Need Support?

Flex AML offers:

Customised templates
UBO checklists
Compliance-friendly onboarding processes

📅 Book a free 30-minute consultation to see how we can help.