UBOs can be concealed by layers of complex structures that are designed to hide who is behind a legal entity. This means doing the work of UBO verification and keeping that information up-to-date to stay compliant can eat up a lot of time. It often requires finding and cross-checking information from multiple sources. But falling short on the task can let criminals slip through the cracks and expose your organization to penalties.
If a company is owned by a single shareholder, it’s easy: that shareholder is the UBO and that’s the end of the story.
It gets tricky when the number of ownership layers, and the number of owners per layer, increases. Essentially, it means financial institutions must determine the ownership of each layer. On top of that, because beneficial ownership can be exercised in different ways, the complex process of determining the UBO must usually be done on a case-by-case basis.