beneficial owner

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Beneficial owner is a person or entity who ultimately owns or controls an interest in a legal entity, such as a security, property, or interest in a trust

In the Securities context, for example, individuals who are beneficial owners of more than 5% of any class of a public company’s stock must file a Schedule 13D or Schedule 13G. Securities Act Rule 13d-3 defines “beneficial owner” as “any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: (1) Voting power which includes the power to vote, or to direct the voting of, such security; and/or, (2) Investment power which includes the power to dispose, or to direct the disposition of, such security.”

[Last updated in February of 2022 by the Wex Definitions Team]