UBO Verification in Practice
A practical UBO verification guide with an ownership example, a control-rights scenario, a reusable evidence worksheet and a documented assessment.
On this page ↓
From ownership structure to a documented decision.
A useful ultimate beneficial owner (UBO) review should leave the next reviewer able to answer three questions: who ultimately owns or controls this customer, what evidence supports that conclusion, and what remains unresolved?
This guide follows a corporate onboarding case through five steps, with a reusable evidence worksheet and a completed fictional assessment.
Scope: private companies with ordinary shares. Apply the requirements relevant to your firm and customer; trusts and specialist structures need separate treatment. This is operational guidance, not legal advice.
1. Establish the ownership and control test
Record the applicable ownership threshold, method for assessing indirect interests, control tests and relevant exemptions. Use applicable law and supervisory guidance, reflected in your approved policy. The FATF Recommendations establish international standards implemented through national frameworks, rather than one universal ownership test.
Share percentages may tell only part of the story. Voting arrangements, significant influence and rights to appoint or remove a majority of directors can also matter.
Separate UK control example: Idris owns 10% of a private company, but its articles give him an unconditional right to appoint or remove three of its five directors. That majority-board right brings him within the UK control test despite the small shareholding. Record the provision and effective date, and take the required identity-verification measures. See HMRC guidance on ownership and control.
Practical output: a recorded assessment method explaining whom to identify and why.
2. Trace every relevant ownership path
Consider a fictional applicant, Example Trading Ltd, owned equally by two holding companies.
- Holding A owns 50% of the applicant. Maya owns 40% of Holding A, and Leo owns 60%.
- Holding B owns the other 50%. Maya also owns 40% of Holding B, and Nora owns 60%.
For this example, assume the test uses proportionate indirect interests, aggregates them across paths, and identifies people holding more than 25%. These are illustrative assumptions, not the legal test for any named jurisdiction.
| Person | Through Holding A | Through Holding B | Combined interest |
|---|---|---|---|
| Maya | 40% × 50% = 20% | 40% × 50% = 20% | 40% |
| Leo | 60% × 50% = 30% | None | 30% |
| Nora | None | 60% × 50% = 30% | 30% |
All three meet the example’s ownership test. Looking at each path separately would miss Maya: neither individual path exceeds 25%, but her combined interest does.
The reviewer still needs evidence supporting those percentages, verification of the relevant individuals’ identities, and an assessment of additional control arrangements.
Practical output: an ownership map connecting each relevant relationship to supporting evidence.
3. Verify identities and ownership evidence
Keep identity evidence and ownership evidence distinct. An identity document or suitable electronic verification helps establish who Maya is. Shareholder records, registry information and relevant agreements establish her connection to the applicant. Understanding the structure and taking reasonable measures to verify beneficial owners’ identities are separate parts of customer due diligence.
For each material link, record the source, document date, date obtained and fact it supports. Where control depends on an agreement, retain the relevant provision rather than recording only “control confirmed”.
Registry information does not automatically complete the assessment. In the UK, regulation 28(9) prevents firms from meeting the relevant beneficial-owner requirements solely through specified information supplied to the registrar.
Choose additional evidence according to the risk and uncertainty being resolved, rather than sending every applicant the same expansive document list.
4. Resolve discrepancies with a specific request
Suppose Example Trading’s declaration lists Maya’s interest as 20%, while the shareholder records indicate 40%. Check whether the documents describe the same point in time. Then ask:
Your declaration shows Maya holding 20% of Example Trading. The shareholder records indicate interests through both Holding A and Holding B, totalling 40% under our assessment method. Please confirm her current holdings in both companies and provide evidence of any changes.
Keep the original declaration, clarification and evidence supporting the accepted position. Do not silently replace the percentage and lose the explanation.
Where a material gap remains, mark the assessment as unresolved and assign a named reviewer. If required due diligence cannot be completed, apply the relevant restrictions and consider reporting obligations. FATF Recommendation 10 addresses not establishing or terminating relationships in those circumstances, and considering a suspicious transaction report.
A senior-managing-official fallback must follow the applicable conditions and recorded ownership-and-control enquiries, including the required identity checks. FATF’s beneficial-ownership guidance in its glossary explains that this fallback serves customer due diligence; it does not redefine the official as the actual beneficial owner.
5. Record the decision and review triggers
Reusable evidence worksheet
Download the UBO evidence worksheet (.xlsx)
The Excel workbook includes a blank case summary, an evidence register with status dropdowns, and a fictional worked example.
Copy this record for each material fact or relationship. Keep separate entries for conflicting sources. Reference documents in your approved secure store, rather than copying sensitive identity documents into the worksheet.
| Worksheet field | Your entry |
|---|---|
| Person, entity or relationship | [Name and link in the ownership structure] |
| Fact or control right | [Interest, calculation or governing provision to establish] |
| Evidence and dates | [Secure source reference; effective/document date; date obtained] |
| Verification result | [Pending / Verified / Discrepancy / Unresolved / Not applicable] |
| Issue and next action | [What remains uncertain and the specific evidence or review needed] |
| Responsibility | [Action owner and due date; reviewer and review date] |
Keep the case-level rules, policy version, assessment status and sign-off alongside the evidence register. An unanswered field does not count as a completed check.
Completed fictional assessment
The following conclusion assumes the fictional checks have been completed. The separate Idris example is not part of this case.
Shareholder records support Maya’s combined 40% interest and Leo’s and Nora’s 30% interests under the example’s assessment method. The corrected declaration confirms that Maya’s original 20% figure omitted the Holding B path. Identity verification is complete for all three. Review of the articles and relevant agreements identified no additional controller. The original and corrected declarations, source references, reviewer rationale and sign-off are retained. Ownership assessment: complete. Customer approval: pending the remaining onboarding checks.
Define changes that reopen the review: ownership transfers, changed control rights or new information contradicting the recorded position. Combine these triggers with risk-based periodic reviews. HMRC guidance includes updating due diligence when circumstances change and retaining supporting records.
For the wider workflow, see the KYB implementation guide and Audit Trail.
Close the review with a conclusion the evidence supports, a named reviewer and clear triggers for reopening it. The next person should be able to follow the decision from the record. Where a material question remains unanswered, preserve it as an owned action instead of marking the assessment complete.