Look for individuals behind the customer
The AML/CTF Act defines a beneficial owner of a non-individual person as an individual who ultimately owns 25% or more, directly or indirectly, or controls that person. Ownership and control are alternative routes. A person can qualify through control without holding the stated ownership percentage.
Section 28 requires the identity of beneficial owners to be established for a customer that is not an individual, subject to applicable Rules and exceptions. Listing an immediate company shareholder does not necessarily identify the individual behind it. Likewise, a director's name does not by itself establish the full beneficial ownership record.
- Anti-Money Laundering and Counter-Terrorism Financing Act 2006: Section 5 definition of beneficial owner; section 28(2)(d)
- AML/CTF Rules 2025: Sections 6-7 and 6-8
- Customer company
The entity receiving the service.
- Intermediate company
A registry search may identify another company as legal owner.
- Ultimate individuals
Trace relevant ownership and assess control separately, subject to applicable Rules.
Look beyond the first company name
Hypothetical ownership chain. Lines indicate the enquiry, not ownership percentages. The first company identified need not be the ultimate beneficial owner.
Connected concepts. Lines do not show ownership or a reporting hierarchy.
Check the current special measures
The Rules contain specific deemed-compliance measures. Section 6-7 addresses qualifying listed public companies, government bodies and certain ownership or control connections to them. These conditions were amended in March 2026. They should not be replaced with a general statement that every corporate customer needs the same tracing exercise.
Section 6-8 separately covers bodies corporate, partnerships and unincorporated associations. One deemed-compliance measure applies where all reasonable steps fail to establish beneficial-owner identity. It requires records of those steps and difficulties, plus collection and risk-appropriate verification of the chief executive officer’s identity (or equivalent). A separate measure applies where the business establishes on reasonable grounds that no beneficial owner exists. It requires the chief executive officer’s identity (or equivalent) to be established. Failure to obtain an answer is not, by itself, proof that no beneficial owner exists.
Trace the route, then explain the result
For a straightforward ownership chain, record each entity between the customer and the individual. Keep the ownership evidence for each link. If an individual has more than one route to the customer, examine the combined position without counting the same interest twice. The result should explain how the person ultimately owns the relevant interest, not merely repeat the first shareholder name found.
Control needs a separate enquiry. Voting arrangements, appointment powers or practical influence may matter even where the ownership calculation is below 25%. Read section 11 for the actual control test. Share classes, trusts and other rights can make a simple percentage calculation insufficient. Use a diagram to expose those questions, not to conceal them behind a neat total.
Maya’s indirect 30% interest
In this simplified fictional example, Maya owns 60% of Holding Co. Holding Co owns 50% of Customer Co. Assume ordinary proportional ownership and no other relevant rights. Maya’s indirect interest through this single route is 60% multiplied by 50%, which equals 30%. The reviewer records both links and the evidence for each one.
This calculation clears the 25% ownership threshold for the stated facts. It does not establish that Maya is the only beneficial owner. The remaining shares and the control position still need examination. For example, another person may have relevant control rights without owning 25%. The reviewer must not stop merely because one qualifying individual has been found.
If the file contains a second ownership route or unusual rights, redraw the arrangement and assess those facts. Do not apply this two-link arithmetic as a complete legal method for every structure. The related ownership-and-control article explains why the two tests must remain separate.
- Anti-Money Laundering and Counter-Terrorism Financing Act 2006: Section 5 definition of beneficial owner; section 28(2)(d)
- AML/CTF Rules 2025: Sections 6-7 and 6-8
- Anti-Money Laundering and Counter-Terrorism Financing Act 2006: Section 5 definition of beneficial owner; section 11 control; section 28(2)(d)
- Customer company
Start with the customer whose beneficial owners must be established.
- Intermediate company
An entity in the chain is not automatically the final answer.
- Individual people
Assess who ultimately owns or controls the customer, subject to the applicable Rules and exceptions.
Look through an intermediate company
Read this visual with the source conditions and explanation in this section.
Follow the process from top to bottom.
- Maya owns 60%
Maya owns 60% of Holding Co in this fictional example.
- Holding Co owns 50%
Holding Co owns 50% of Customer Co.
- 60% × 50% = 30%
Maya has a 30% indirect interest through this single, proportional route.
- Check other routes
Other owners, rights and control may still identify further individuals.
A simple indirect ownership calculation
Hypothetical arithmetic with ordinary proportional ownership. It is not a complete ownership or control assessment.
Follow the process from top to bottom.
Keep the conclusion separate from the chart
An ownership chart is a helpful way to organise evidence. It should identify which links are established and which remain uncertain. A chart can look complete even when it omits a control arrangement, so the final conclusion should explain both ownership and control.
For practical review, ask whether another person can identify why each named individual qualifies and why any branch was not followed further. Do not label a senior manager a beneficial owner merely to fill an empty field. The relevant Rules may require identification of a senior individual for a different reason. Preserve that distinction in the file.
Record uncertainty without inventing an owner
A useful ownership record states the individual, route, relevant percentage or control basis, source evidence and unresolved limits. Date the evidence so a later reviewer can distinguish the current structure from an earlier one. Where a customer chart and another source conflict, describe the difference and assign a follow-up.
Keep the section 6-8 special measures separate from the ownership conclusion. Identifying a chief executive under a qualifying measure does not make that executive a beneficial owner. A blank response from the customer also does not establish that no beneficial owner exists. Record the applicable condition, the steps taken and the resulting decision rather than choosing a convenient name to complete the field.