Who is a beneficial owner?

A beneficial owner is always the living, breathing human being who ultimately profits from the company’s activities, or controls the company’s activities. It is never a company, other legal entity, or a nominee/proxy. The Companies Act No 10 of 2017 as read together with the Companies (Amendment) Act No 12 of 2020 defines a Beneficial Owner as follows:

means a natural person who—

  1. (a) directly or indirectly, through any contract, arrangement, understanding, relationship or any other means ultimately owns, controls, exercises substantial interest in, or receives substantial economic benefit from a corporate;
  2. (b) exercises ultimate and effective controls over a legal person or legal arrangement; or
  3. (c) effectively controls a legal person or legal arrangement on whose behalf a transaction is conducted; and the terms “ beneficially own”, “beneficial ownership” and cognate

expressions shall be construed accordingly; and

In the above definition, it is clear that the concept of “ownership and control” is central to the definition of Beneficial Ownership