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Beneficial Ownership Required Information

The U.S. Department of Treasury recently issued regulations that creates new due diligence obligations for banks and other financial institutions. Under this new regulation, all banks are required to collect and verify the identities of certain individuals who have ownership stake or control in legal entity customers, including corporations, Limited Liability Companies (“LLCs”), partnerships, and other legal entities. Those certain individuals who own or control legal entity customers are considered “Beneficial Owners” on the legal entity customer account.  This information is collected on a Certification of Beneficial Ownership form

Who has to complete the form?

Starting in May 2018, each time a legal entity customer (business) account is opened or maintained, Belmont Savings Bank is required to collect beneficial ownership information as well as identification documentation.

  • Each individual, if any, who owns, directly or indirectly, 25% or more of the equity interests of the business (e.g., each natural person that owns 25 percent or more of the shares of a corporation) and,
  • One individual that has significant managerial control of the business (e.g., a chief executive officer, chief financial officer, president, vice president, or treasurer).

What information do I have to provide? 

If you are opening an account on behalf of a business, you will be required to provide the following information on a Certification of Beneficial Ownership form:  

  • Name
  • Address of primary residence 
  • Date of birth 
  • Social security number 
  • A copy of the document used to identify them
    (e.g. driver’s license or passport)

The person opening the account on behalf of the business must sign the form attesting that the information provided is accurate to the best of their knowledge. 

Frequently Asked Questions:

Q: What is the beneficial ownership rule?
A: The U.S. government implemented the new beneficial ownership regulation to help fight financial crimes. Starting May 11, 2018, the beneficial ownership regulation requires all financial institutions to identify and verify the identities of the beneficial owners of legal entity customers as well as a controlling person of the legal entity at the time an account is opened or maintained. The rule is aimed at making financial institutions safer for their customers and protecting the country’s financial system.

 

Q: Who is a legal entity customer?
A: Legal entity customers include the following entities created by a filing with a state office or with a Secretary of State:

  • Corporations
  • Limited liability companies
  • Limited partnerships
  • General partnerships
  • Business trusts (created by state office filing)
  • Any other entity created by a state office filing, including similar entities formed under law of other countries


Q: What constitutes a beneficial owner?
A: Beneficial owners are defined in two ways:

  • Each individual, if any, who owns, directly or indirectly, 25% or more of the equity interests of the business (e.g., each natural person that owns 25% or more of the shares of a corporation) and,
  • One individual that has significant managerial control of the business (e.g., a chief executive officer, chief financial officer, president, vice president, or treasurer).

Q: What is the definition of an "individual with significant managerial control"?
A: This is the person that has significant responsibility to control, manage, or direct the company. Examples include a chief executive officer, chief financial officer, chief operating officer, managing member, general partner, president, vice president, or treasurer. Generally, this is the individual who has the authority to act on behalf of your legal entity.

Q: Are there any entities that are excluded from the definition of a legal entity customer?
A: Yes. The definition if a legal entity customer excludes certain entities such as:

  • Individuals opening accounts on their own behalf
  • Sole proprietorship's
  • Unincorporated associations, such as a local Girl Scout troop or a neighborhood association
  • Trusts, other than statutory trusts created by a filing with a state office

Q: What information do I need to provide Belmont Savings Bank?
A: Each time a business account is opened or maintained, we will be required to ask you for identifying information (name, residential address, date of birth, social security number) as well as identification documentation (driver’s license or passport). If you are opening an account on behalf of a business, you will be required to provide appropriate documentation and to sign a Certification of Beneficial Owners of Legal Entities form and certify that this information is true and accurate to the best of your knowledge.


Q: Does Belmont Savings collect beneficial ownership information on all of the beneficial owners of a legal entity?
A: The Bank must collect and verify the beneficial ownership information of each beneficial owner that has an equity interest of 25% or more in the legal entity, and one individual that has significant managerial control of the business.

Here are some examples of how the form should be completed in certain circumstances:

  • If there are four owners, each own 25%, then information on all four owners should be entered in the Ownership section of the form, and information on one person in control of the entity should be entered in the Control section.
  • If there are two owners of 40% and one owner of the remaining 20%, then information on the two 40% owners should be entered in the Ownership section of the form, nothing needs to be entered for the 20% owner, and information on one person in control of the entity should be entered in the Control section.
  • If there are five owners of 20% each, then no information needs to be listed on any of those owners in the Ownership section of the form, the box that states “If checked, Beneficial Owner listing requirement is Not Applicable” should be checked, and information on one person in control of the entity should be entered in the Control section. 
  • If your organization is a nonprofit entity, so it really doesn’t have any owners, then nothing needs to be entered in the Ownership section of the form, the box that states “If checked, Beneficial Owner listing requirement is Not Applicable” should be checked, and information on one person in control of the entity should be entered in the Control section.

Q: When will I be required to provide beneficial ownership information?
A: Beneficial ownership information is required when a new business account is opened and/or a new loan is obtained. This includes safe deposit boxes, investments, and trust services.  

Q: How will Belmont Savings Bank collect the information?
A: A Certification of Beneficial Owners of Legal Entities form will be used to obtain the required beneficial ownership information. 

Q: What does signing the Certification of Beneficial Ownership form mean?
A: Signing the Certification of Beneficial Owners of Legal Entities form means that the person signing the form is stating that to the best of his or her knowledge, the information on the form is complete and correct.


Q: Will I have to provide this information to Belmont Savings on a regular basis?
A: Once the Bank has obtained a Certification of Beneficial Owners of Legal Entities form for your legal entity, we may ask that you confirm the information when you open additional new accounts. If nothing has changed, we will ask you to re-certify the information on file. Please let us know if there is a change in ownership or control of your company so we can obtain an up-to-date Certification of Beneficial Owners of Legal Entities form that reflects accurate information.


Q: Does Belmont Savings need to collect beneficial ownership information for my personal accounts?
A: No. The beneficial ownership regulation only applies to applicable business accounts.

Q: What is considered an account under the beneficial ownership rule?
A: Any business deposit, lending, investment, or safe deposit account.

Q: What if one of the owners is from another country and doesn’t have a Social Security Number?
A: In that case, instead of entering anything in the Social Security column on the Certification of Beneficial Owners of Legal Entities form, you should enter a passport number and the name of the country that issued the number in the last column labeled “For Foreign Persons”.

Q: Is Belmont Savings Bank the only bank that is required to collect beneficial ownership information?
A: No.  All U.S. financial institutions are required to comply with the new beneficial ownership rule and will be collecting this beneficial ownership information from applicable customers.

Q: Will Belmont Savings Bank keep my information confidential?
A: Yes. Belmont Savings Bank is subject to privacy and information security requirements that cover this information. For more information on the Bank’s Privacy Policy, click here.

 

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