Beneficial Ownership Calculator

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Calculating Beneficial Ownership typically involves identifying who ultimately owns or controls a company, even if the ownership is held indirectly through other entities or arrangements. There isn’t a strict mathematical formula but rather a process of identifying individuals who meet specific thresholds or conditions. It’s important to determine beneficial ownership of a company to calculate an accurate statement of financial position.

What is the Beneficial Ownership?

Beneficial Ownership refers to the natural person(s) who ultimately own or control a legal entity (like a company), even if they are not listed as the legal owner.

Steps to Calculate/Determine Beneficial Ownership:

1. Identify Direct Ownership

  • List all individuals who directly own shares in the company.
  • Check if any individual owns 25% or more of the shares or voting rights.
  • These people qualify as beneficial owners.

2. Trace Indirect Ownership

  • If ownership is through another company, trust, or partnership, trace through each layer.
  • Multiply percentages through each ownership level.

Example:

  • Mr. X owns 50% of Company XYZ
  • Company XYZ owns 60% of Company ABC
  • → Mr. X’s indirect ownership in Company ABC = 50% × 60% = 30%

3. Determine Control

Even if someone owns less than 25%, they may still be a beneficial owner if they:

  • Have significant influence or control (e.g., voting agreements, appointment of board members)
  • Act as a trustee or settlor within a trust structure.
  • Exercise control through other means (contracts, informal agreements)

4. Aggregate Ownership

  • If an individual owns shares through multiple paths, sum the ownership percentages.
  • A person is considered a beneficial owner if their total ownership or control equals or exceeds 25%, though this threshold may vary by country.

Example of a Beneficial Ownership Calculation

Suppose Company A is owned as follows:

  • John owns 60% directly of Company A→ John is a beneficial owner.
  • Jane owns 50% of Company B, and Company B owns 40% of Company A →
  • Jane’s effective ownership at Company A = 40% × 50% = 20% → So, he is not a beneficial owner because the threshold is 25%.

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