Understanding Key Roles: UBOs / Shareholders / Directors / Legal Representatives

Last updated: February 10, 2026

Here is a simple guide to help you identify who is who in an organization.

1. Ultimate Beneficial Owner (UBO)

The UBO is the natural person (a human being) who ultimately owns or controls a legal entity. Identifying the UBO is a critical regulatory requirement designed to prevent the use of complex corporate structures for financial crime.

  • The 25% Threshold: In most jurisdictions, a UBO is defined as any individual who directly or indirectly holds 25% or more of the shares or voting rights. In some jurisdictions, this can also be 10% or more.

  • Layered Ownership: If a company is owned by another entity (a "Parent Company"), you should trace the ownership chain until a natural person is identified.

  • UBO by Control: If no individual meets the ownership percentage, the person exercising "significant control" over the company's management (e.g., a CEO or Managing Director) may be designated as the UBO.

2. Shareholder

A Shareholder is an individual or legal entity (such as a corporation or trust) that owns at least one share of the company’s stock.

  • Distinction from UBO: A shareholder can be another company, whereas a UBO must be an individual.

  • Verification: During the onboarding process, we may request a Shareholder Registry to validate the distribution of equity or directly pull it from the registry database.

3. Director

Directors are the individuals appointed to the Board of Directors, responsible for the high-level governance and strategic direction of the organization.

  • Compliance Role: As "Control Persons," Directors are often subject to KYC screening (Sanctions, PEP, and Adverse Media) even if they do not hold an ownership stake.

  • Documentation: Verification typically requires a Register of Directors or an official filing from a local commercial registry (e.g., Companies House or Secretary of State) or a direct pull from the registry database.

4. Legal Representative (Authorized Signatory)

The Legal Representative is the individual officially empowered by the company’s bylaws or a Power of Attorney to execute contracts and represent the entity in legal matters.

  • The "Power of the Pen": This individual is authorized to sign the Service Agreement and bind the company to its terms.

  • Overlap: While the Legal Representative is often a Director or C-suite executive, their authority must be explicitly documented to satisfy compliance audits.

FAQs

Can one person hold all these roles? Yes! Especially in smaller businesses, one individual is often the sole Shareholder, the only Director, the Legal Representative, and the UBO.

Why do we need UBO’s personal ID? To comply with global financial regulations, we are required to verify the identity of the individuals who ultimately control the businesses we partner with. This helps prevent financial crime and ensures a secure platform for everyone.

What if the company is owned by another company? In this case, we look through the layers of ownership until we find the "natural persons" (the humans) who own the parent company. Those individuals are your UBOs.