> ## Documentation Index
> Fetch the complete documentation index at: https://docs.lead.bank/llms.txt
> Use this file to discover all available pages before exploring further.

# Beneficial Ownership Requirements

> Which beneficial owners and control persons to link to a business entity, the 25% threshold, and the drill-down rule for ownership through holding companies.

A business entity lists the people who own and control it. Each of those people is an individual entity, linked to the business by `entity_id` in `beneficial_owners[]` and `control_persons[]`. See [Linked entities](/v2/products/entity/entity-object#linked-entities). This page covers who to list, at what ownership threshold, and how to handle ownership through other companies.

Sole proprietorships do not list beneficial owners or control persons. Set `sole_proprietor` to the individual behind the business instead.

> [!TIP]
>
> #### Requirements
>
> Lead requires beneficial ownership information in line with the Customer Identification Program (CIP) reviewed during due diligence. At a minimum, list **every natural person who owns 25% or more** of the business, directly or indirectly, in `beneficial_owners[]`.
>
> * **Control person:** list at least one natural person with significant responsibility to control, manage, or direct the business, like a CEO, COO, or president, in `control_persons[]` with a `title`. A control person is required regardless of ownership percentage.
> * **Lower thresholds:** if your Know Your Business (KYB) process states a threshold lower than 25%, list every beneficial owner who meets your threshold.

If no natural person meets the threshold, send an empty `beneficial_owners` array. The business still needs a control person.

Every linked beneficial owner and control person must be eligible for `authorized_signer`, even if they will never sign. If one is not, the business is ineligible for `account_holder`, and its `failed_checks` point at that individual's `entity_id`. See [Failures on a linked entity](/v2/products/entity/eligibility#failures-on-a-linked-entity).

## The drill-down rule

A beneficial owner must be a natural person. If another company, like a parent or holding company, owns 25% or more of the business, do not link that company as a beneficial owner. Apply the same 25% test to that company's owners instead. Continue up the chain until you have found every natural person with a 25% or greater indirect stake in the original business.

> **Simple Ownership (Bob's Pizza Company)**
>
> * **Business:** Bob's Pizza Company
> * **Owners:** Alan (individual, 60%) and Bob (individual, 40%, also CEO)
> * **Other individual:** Charlie, an authorized signer on the user account
> * **Action:**
>   1. Create individual entities for Alan, Bob, and Charlie that meet the [`authorized_signer` data requirements](/v2/products/entity/eligibility#data-requirements).
>   2. Create the business entity for Bob's Pizza Company. List **Alan** and **Bob** in `beneficial_owners[]`, since each owns 25% or more. List **Bob** in `control_persons[]` too, with the title `CEO`.
>   3. Do not link Charlie to the business. Charlie is neither an owner nor a control person. Add Charlie to the user account as an authorized signer instead.
>
> ```json theme={null}
> {
>   "type": "business",
>   "beneficial_owners": [
>     { "entity_id": "entity_alan_001", "ownership_percentage": "60" },
>     { "entity_id": "entity_bob_001", "ownership_percentage": "40" }
>   ],
>   "control_persons": [
>     { "entity_id": "entity_bob_001", "title": "CEO" }
>   ]
> }
> ```

> **Complex Ownership (SaaS Co)**
>
> * **Business:** SaaS Co
> * **Direct owners:** Parent Corp (company, 80%) and Jane Smith (individual, 20%)
> * Parent Corp is a company that owns 25% or more, so drill down. **Parent Corp's owners:** Holding LLC (company, 50%) and Mark Lee (individual, 50%)
> * Holding LLC is a company, so drill down again. **Holding LLC's owner:** Susan Kay (individual, 100%)
> * **Each person's stake in SaaS Co:**
>   * Jane Smith: 20% direct. **Not** a beneficial owner.
>   * Mark Lee: 50% of 80% = 40% indirect. **Is** a beneficial owner.
>   * Susan Kay: 100% of 50% of 80% = 40% indirect. **Is** a beneficial owner.
> * **Action:** create individual entities for **Mark Lee** and **Susan Kay** that meet the [`authorized_signer` data requirements](/v2/products/entity/eligibility#data-requirements), and list both in `beneficial_owners[]`. Do **not** create or link entities for Parent Corp or Holding LLC. Also create an individual entity for SaaS Co's **control person**, like its CEO, and list that person in `control_persons[]`. The control person may or may not be one of the beneficial owners.

## Related

[Entity Overview](/v2/products/entity/overview) · [The Entity Object](/v2/products/entity/entity-object) · [Entity Eligibility](/v2/products/entity/eligibility)


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