The Act separates two duties that are easy to run together. Identifying who your beneficial owners are, and verifying that they are who they say they are and have a ownership or control interest. Both must be done before anyone goes on your register.
1. Take reasonable steps to identify
You must take reasonable steps to identify any individual who is a beneficial owner, and all relevant legal entities through which an interest is held. Apply the three tests in order: ownership or control of twenty-five per cent or more, ultimate effective control over management, and control by other means. If none of them identifies anyone, the senior manager is treated as the beneficial owner.
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2. Issue statutory notices where you need to
Where reasonable steps do not produce the answer, issue a statutory notice. The notice is to be issued as soon as practicable, and the recipient has thirty days to respond.
The notice is a tool, not a formality. Issuing one, and recording that you did, is part of showing that your steps were reasonable.
3. Verify against a reliable and independent source
You must take reasonable measures to verify the identity and status of each beneficial owner by means of documents, data or information obtained from a reliable and independent source, and you must do so before entering them on your register.
Verification is not the same as identification
Being told who the owner is, and checking it against an independent source, are two different things. The duty to verify was strengthened by the Beneficial Ownership Act 2025 and is now express.
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4. Keep records of what you did
Retain records of the verification you carried out. Where no beneficial owner was identified, keep records of the search you undertook. These records are what a defence of reasonable steps and due diligence is built on, and they are what we and a competent authority will ask to see.
If you cannot identify anyone
Where no individual satisfies any of the three tests, the individual holding the position of senior manager is treated as the beneficial owner and is entered on your register as such. An empty register is not an answer. Record the search you carried out that led you there.
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