What is a Beneficial Owner?

Malcolm Tatum
Malcolm Tatum

A designation of beneficial owner has to do with an individual or entity that is granted the use and title to properties, even though another person or business holds the legal title to the property. The beneficial owner is able to enjoy all the benefits of owning property, while the actual titleholder is free to focus on other matters as long as the property is being managed and cared for. Here are some examples of how the concept of a beneficial owner is employed.

Businessman with a briefcase
Businessman with a briefcase

Though beneficial owner has full ability to make decisions within the scope of the responsibilities delegated by the titleholder as long as the arrangement remains in force, there are certain restrictions. In terms of property, an agreement of this type can be ideal for someone who owns property that he or she rarely uses. The beneficial owner is empowered to take care of property taxes, live on the property, maintain any dwellings found on the grounds, and rent or lease portions of the property on the behalf of the titleowner. Generally, the beneficial owner will render some sort of scheduled accounting or status report to the titleowner; this ensures there are no miscommunications about the boundaries of the rights and responsibilities of the beneficial owner.

The principle of a beneficial owner also comes into play with securities as well. Perhaps the most common application would involve a brokerage firm. In this scenario, the owner of the security or securities would turn over management and control to the firm, allowing them carte blanche in the administration of the securities. For all practical intents and purposes, the brokerage firm has the benefits of owning a security for as long as the owner of record wishes to maintain the relationship. This creates a situation where the firm can deal with the securities in a manner that is in the best interests of the owner of record and the firm, without having to consult the actual owner on every little detail.

Beneficial owners also may be involved in the management of intellectual property as well, such as book manuscripts and other writings. For example, an author may choose to transfer a specified list of rights to an employer or other copyright owner, while still retaining some degree of interest in the usage of the writings. This is not unusual when a writer is on the staff of a print or online publication, where the writings become copyrighted material for the employer. Generally, the author may retain reprint rights and usually is granted a byline, thus retaining some control of the property, but still allowing the copyright holder to utilize the material in applications associated with the business operations of the copyright holder.

Malcolm Tatum
Malcolm Tatum

After many years in the teleconferencing industry, Michael decided to embrace his passion for trivia, research, and writing by becoming a full-time freelance writer. Since then, he has contributed articles to a variety of print and online publications, including wiseGEEK, and his work has also appeared in poetry collections, devotional anthologies, and several newspapers. Malcolm’s other interests include collecting vinyl records, minor league baseball, and cycling.

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Discussion Comments


Can someone please post the name of the United States Federal Corporation ownership act along with the federal trust act? Thanks!


The canadian ownership and control determination act goes along with the state immunity act, the bank act and the trust and loans companies act, a must read for the folk trying to figure out what's happening in society, slavery. Yes, it's legal in canada.


The Canadian Ownership Control and Determination Act covers exactly what you're speaking of since the Canadian government holds the title of beneficially owned securities known as the Canadian public as of their registry at birth into the registry of the corporation known and traded as Canada on the US stock Exchange. It is an owned debtor itself, being owned by the creditor being the world bank.

All assets registered into the debtor registries now become the property of the creditor by proxy of the receiver general acting on behalf of the creditor. That's why you pay taxes.

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