Ultimate beneficial owners (UBOs) are individuals who may own or control an organization or entity. Identifying a company’s UBOs can be challenging. Ownership structures can be complex, there may be multiple entities and individuals involved, and in some cases ownership information may be difficult to interpret due to layered corporate arrangements.
Understanding who you are doing business with is an important part of managing financial and regulatory risk and compliance. Moody’s solutions bring together global entity records, ownership hierarchies, and risk relevant information to help inform UBO research, screening, and know-your-customer (KYC) processes.
Moody’s solutions can be used to support UBO analysis and due diligence activities by helping increase visibility of beneficial ownership information, control, and shareholder structures. The insights derived from this information can help teams make more informed decisions about those they work with.
Moody’s solutions can help customers identify and review beneficial ownership information across multiple ownership layers, international borders, and complex networks.
Moody’s Orbis database is a powerful comparable data resource on private companies, with information on millions of entities worldwide. Orbis can be used to help calculate power scores and integrated percentages for a fuller picture of beneficial ownership and control.
Moody’s Grid database provides curated, risk-relevant database datasets for use in due diligence, screening, anti-money laundering, and counter-terrorist financing processes. Information about a person or entity can be collated into a risk profile using continuous monitoring of thousands of data sources and coverage of adverse media, sanctions, watchlists, and information on politically exposed persons (PEPs).
Moody's Entity Verification API is a single API that customer relationship management (CRM) or client lifecycle management (CLM) platforms can use to connect with commercial registries, financial authorities, and tax offices in more than 200 countries and jurisdictions. Teams can access original documents and data on millions of companies to better inform UBO research.
Moody’s for Compliance supports workflows related to understanding beneficial ownership and control relationships, bringing together global entity records, ownership hierarchies, and risk relevant information. Leveraging advanced data, analytics, and AI [M(1.1]enhanced screening and due diligence agents, the solution supports customer onboarding, periodic reviews or pKYC, and risk assessment activities, with human judgment remaining an integral part of the process.
UBO transparency matters. Organizations are better positioned to mitigate risk when they can identify UBO transparency matters. Organizations are better positioned to manage financial and regulatory risk when they have visibility into beneficial ownership and control relationships and can monitor potential changes or emerging risk indicators.
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The Bureau of Industry and Security (BIS), part of the US Department of Commerce, plays a key role in safeguarding national security and foreign policy interests through export controls. It introduced the Affiliates Rule, or the 50% Rule, under which export restrictions apply to affiliates that are at least 50% or more owned – directly, indirectly, or by aggregate – by entities on the BIS Entity List or Military-End User List.
With public access to beneficial ownership registries becoming more restricted, organizations face challenges in obtaining ownership insights. This paper explores how Moody's solutions bring together registry data (where permitted) and calculated ownership derived from multiple sources to support analysis of ownership structures, control, and influence across jurisdictions. *This is to the best of our knowledge, as of May 2026.
Join us as we catch up with Jim Richards on developments with the US Corporate Transparency Act (CTA) and FinCEN's beneficial ownership database. Gain valuable insights on the landscape for risk and compliance professionals, and the potential impact on combating financial crime.
According to the Financial Action Task Force (FATF) definition, an ultimate beneficial owner (UBO), “refers to the natural person(s) who ultimately owns or controls a customer and/or the natural person on whose behalf a transaction is being conducted. It also includes those natural persons who exercise ultimate effective control over a legal person or arrangement. Only a natural person can be an ultimate beneficial owner, and more than one natural person can be the ultimate beneficial owner of a given legal person or arrangement.”
FATF Recommendations 24 and 25 highlight how providing adequate, accurate, and up-to-date beneficial ownership information may help reduce the risk of misuses of legal persons and legal arrangements for financial crime.
Broadly, a UBO refers to the person who ultimately owns or controls a business or benefits from its transactions. An example of complex ultimate beneficial ownership would be a situation where a person holds shares in a company through a network of trusts or shell companies, which can make it difficult to determine true ownership. In this case, the ultimate beneficial owner would be the individual who benefits from their share ownership, even though their name may not be directly linked to the company on paper.
Ultimate beneficial ownership is typically determined through a thorough detailed review and analysis of an entity’s ownership structure. This can involve a process of entity verification and UBO checks, such as reviewing information on beneficial ownership registries, databases, or voting or controlling rights or examining legal documents, corporate records, and financial statements to trace ownership. In some cases, UBO identification may require enhanced due diligence to verify the ultimate beneficial owner through a process of UBO discovery.
The determination of UBO status is based on factors that might include the level of ownership or control a person has over an entity, their ability to benefit from its activities, and their influence over decision-making processes. In some jurisdictions, regulations may stipulate a certain percentage ownership (e.g., 25% or more) as a threshold for being considered a UBO, but this can vary depending on the country and the entity’s specific circumstances. Some jurisdictions apply lower thresholds or consider different indicators of ownership or control by other means.
As described in the 6th AML directive, to calculate a specific threshold“...it is necessary to assess simultaneously whether any natural person has a direct or indirect shareholding with 25% or more of the shares or voting rights or other ownership interest, and whether any natural person controls the direct shareholder with 25% or more of the shares or voting rights or other ownership interest in the corporate entity. In the case of indirect shareholding, the beneficial owners should be identified by multiplying the shares in the ownership chain. To that end, all shares directly or indirectly owned by the same natural person should be added together.”
Organizations subject to regulatory requirements, such as financial institutions, conduct risk assessments on UBOs as part of their anti-money laundering (AML) and counter-terrorist financing (CTF) compliance processes.
At the same time, both regulated and unregulated organizations may have reasons to assess whether a UBO could be considered high risk.
These risk assessments can be a part of onboarding processes, such as customer due diligence (CDD) or know your business (KYB), and typically involve gathering information on a UBO’s background, financial standing, and potential risk indicates identified through relevant screening and review. The nature of the business relationship, the types of transactions, and any regulatory risks may also be considered. Based on these findings, organizations can form an assessment of a UBO’s risk profile and make decisions about who they choose to work with.
Not all businesses are required to file beneficial ownership information reports under the Corporate Transparency Act (CTA). But there are enforcement and legal implications if a business is required to report BOI and fails to file its report with FinCEN. There may be several consequences including civil penalties of up to $500 per day for each day the violation continues, and criminal penalties for willful violations, including fines of up to $10,000 and imprisonment for up to two years.
[Correct to the best of our knowledge at the time of publication in May 2026]
This content is for information purposes and doesn't constitute legal, regulatory or compliance advice. The information presented has been prepared to the best of our knowledge at the time of publication.
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