Overview
Whether a you are launching a new business or operating an established one, beneficial ownership is an important concept to understand.
Beneficial ownership requirements apply when opening and maintaining business financial accounts. These rules help ensure transparency and are part of federal efforts to prevent financial crimes.
CreditStrong Business accounts are only available to businesses where no beneficial owner holds more than 25 percent ownership. If any individual beneficial owner exceeds the 25% ownership threshold, the business is not eligible for a CreditStrong Business account, even if the primary applicant owns a smaller or equal share.
What is beneficial ownership?
Beneficial ownership refers to owning or controlling a legal entity, even if the business is registered under another name.
A legal entity generally includes businesses such as:
- Corporations
- Limited liability companies (LLCs)
- General or limited partnerships
- Other entities formed by filing documents with a Secretary of State
Under the Bank Secrecy Act, the Financial Crimes Enforcement Network (FinCEN) requires financial institutions to collect information about the individuals who own or control legal entities.
By law, banks and financial institutions must obtain, verify, and record beneficial ownership information. These requirements help the U.S. government combat financial crimes such as money laundering, tax evasion, and fraud.
Who is considered a beneficial owner?
A beneficial owner is generally defined as an individual who:
- Owns, directly or indirectly, 25 percent or more of the equity interests in a legal entity, or
- Exercises significant control over the business, even if they do not meet the ownership threshold
Individuals with significant control are often referred to as controlling persons.
Common examples include:
- Chief Executive Officer (CEO)
- Chief Financial Officer (CFO)
- Chief Operating Officer (COO)
- Managing Member
- General Partner
- President
- Vice President
- Treasurer
A business may have more than one beneficial owner.
What information is required?
When opening an account for a legal entity, customers are required to provide information for each beneficial owner and controlling person.
This typically includes:
- Full legal name
- Primary residential address
- Date of birth
- Social Security number
- Government‑issued identification, such as a driver’s license or passport (issuer and ID number)
This information is required by law and must be collected before an account can be opened.
How does CreditStrong handle this information?
Whenever an account is opened or maintained for a legal entity, CreditStrong collects beneficial ownership and controlling person information as part of the application process.
We understand this information is personal and sensitive. CreditStrong collects it strictly to meet legal and regulatory requirements.
All information is:
- Securely stored
- Access‑restricted
- Handled in accordance with our privacy and data protection policies
Why is beneficial ownership important?
Beneficial ownership requirements support more than regulatory compliance.
They help:
- Promote transparency in business ownership
- Reduce conflicts of interest
- Support anti‑corruption and anti‑fraud efforts
- Protect the financial system from misuse
Providing accurate beneficial ownership information helps ensure your business account can be opened and maintained without delays.
If you have questions about beneficial ownership or what information is required during the application process, our Support Team is here to help!