Ask two questions
Ownership asks who holds the relevant economic interests. Control asks who can determine the entity's decisions under the applicable legal tests. The AML/CTF Act's beneficial-owner definition includes both. A search that considers only share percentages can therefore miss an individual who qualifies through control.
For a body corporate, section 11 includes several routes to control. They concern voting capacity, specified share capital, board composition and financial or operating policy decisions. The tests are alternatives. Do not assume that failing one percentage test means the person cannot control the entity through another route.
- Customer
A person other than an individual.
- Ownership route
Identify individuals with ultimate direct or indirect ownership of 25% or more.
- Control route
Separately assess individuals who control the customer under the applicable tests.
- Qualified measures
Check relevant Rules before deciding which enquiries are required.
Two routes to beneficial ownership
Hypothetical example: Person A ultimately owns 25% of the company. Person B has no shares but can determine the composition of its board. Ownership of 25% or more and statutory control are separate routes. This shows selected persons, not a complete ownership chart; other owners are omitted.
Hypothetical example. Example company. Person A: 25% ownership. Person B: Board control.
Read powers and practical influence
Section 11's financial and operating policy test considers practical influence and patterns of behaviour, not only enforceable rights. A formal ownership table may therefore be insufficient to explain who controls the entity. The question needs evidence appropriate to the actual structure.
The legal treatment of persons other than bodies corporate has separate provisions. This page focuses on the corporate distinction and does not provide one universal control formula for trusts, partnerships or foreign arrangements. Apply the right provision to the entity you are assessing, and distinguish a formal power from evidence about how decisions are actually made.
Worked example: different voting rights
Imagine a company with several classes of shares. One individual has a smaller economic holding but can appoint a majority of the board under the governing arrangements. Another has a larger economic holding but limited decision rights. A percentage-only chart would not explain the difference.
The reviewer examines the relevant powers and records the basis of the control conclusion. This is a fictional illustration, not a ruling on a real company's documents. The presence of an unusual share structure does not prove wrongdoing. It creates a question that needs an answer before the ownership record is treated as complete.
A shareholder and a controller can be different people
In the diagram, Person A ultimately owns 25% of the company. Person B has no shares but can determine who sits on its board. Person A meets the ownership threshold shown. Person B needs to be assessed under the separate control test. Checking share percentages alone would miss the reason Person B is relevant.
For an actual company, check the rights and arrangements that support each conclusion. The evidence for a shareholding may differ from the evidence for control. Record any uncertainty instead of treating an incomplete chart as a settled result. The diagram is a hypothetical example and omits other owners; it is not a complete assessment of a company.
- Share record
Supports an ownership interest at a particular point in time.
- Rights and arrangements
Can explain a power to control decisions.
- Current position
Reconcile both types of evidence. A percentage alone does not settle control.
What does each piece of evidence establish?
Read this visual with the source conditions and explanation in this section.
Separate evidence questions. An answer to one does not settle the others.