UBO — Ultimate Beneficial Owner
Ultimate Beneficial Owner — each person holding 25%+ of a business. Must be verified with photo ID at account opening.
Ultimate Beneficial Owner — any natural person who ultimately owns or controls, directly or indirectly, 25% or more of a legal entity, or who otherwise exercises substantial control over the entity.
Why UBOs must be identified
US anti-money laundering regulations (specifically FinCEN’s Customer Due Diligence rule) require financial institutions to identify and verify all UBOs of any business opening an account. This closes the loophole of criminals hiding behind shell companies.
What the verification involves
Each UBO must provide:
- Government-issued photo ID (passport or national ID)
- Proof of address (utility bill, bank statement, or equivalent)
- A selfie for liveness verification
Verification is automated in the paype app. Most UBOs complete it in under 5 minutes.
Multiple UBOs
A business can have multiple UBOs — any combination of owners each holding 25%+. A business where one person holds 100% has one UBO. A 50/50 partnership has two. If no single person holds 25%+, the person with substantial management control is typically verified instead.