Beneficial owner of a limited liability company – what applies?
There are different guidelines on beneficial ownership depending on the type of company. Below we provide more information on what applies to a limited liability company, the most common type of company in Sweden (aktiebolag).
All limited liability companies in Sweden are required to report information about the beneficial owner to the Swedish Companies Registration Office. The beneficial owner here refers to the individual or individuals who have ultimate ownership or control of the limited liability company. This definition also includes those persons who benefit from someone else acting on their behalf.
Does every company have a beneficial owner?
All types of limited liability companies are subject to the requirement to report the beneficial owner.
This rule applies to:
Limited liability companies, including those in bankruptcy, provided that the bankruptcy has not yet been finalized.
Mutual fund companies
Credit market companies
Securities companies
Before the notification of a beneficial owner can be made, the limited liability company must establish whether it actually has one or more beneficial owners and, if so, identify these persons. If there are one or more beneficial owners, it is also necessary for the limited liability company to specify how these individuals exercise control over the company and to what extent, expressed as a percentage.
However, it is possible to find out after investigation that there is no person who ultimately owns or controls the limited liability company. In such a case, the limited liability company is considered to be without a beneficial owner.
It should be noted that it can sometimes be difficult to determine whether there is a beneficial owner or not. Even if in practice a limited liability company has a beneficial owner, there may be insufficient information to identify this person. It is thus a process that varies between companies and it is not always clear whether each company has a clearly defined beneficial owner or not.
Definition of a beneficial owner
An overview of the person or persons who hold the ultimate ownership or control over a corporation and the various ways this can be expressed.
Expression of control:
A closer look at how control over a corporation can be manifested, including having over 25 percent of the votes through shares and the authority to appoint or remove board members.
Agreements and provisions:
Emphasis on how agreements or provisions in the articles of association can be crucial in establishing a person as the beneficial owner.
Influence of related parties:
Explanation of how control over a corporation owned or controlled by a person and their relatives is combined, including the definition of relatives.
Beneficial owner in several companies:
An overview of how the beneficial owner is identified in a group of several companies, especially the person who controls the company that ultimately owns the other companies in the group.
Appointing a beneficial owner in a company
Example of an individual shareholder as the beneficial owner:
An individual shareholder holds over 25 percent of the votes in a corporation, which qualifies the person as the beneficial owner. The possibility of more beneficial owners cannot be excluded.
Example of related parties as joint beneficial owners:
Two registered partners, each with 15 percent of the votes in a corporation. As they are related, their controls are combined, and both are considered beneficial owners. If it is determined that only one of them has the ultimate control, that person becomes the sole beneficial owner. The possibility of more beneficial owners remains.
Example of a shareholder with board powers as the beneficial owner:
A shareholder controls only 10 percent of the votes but has the right, through agreement with other shareholders, to appoint more than half of the board members. This person is thereby a beneficial owner. The possibility of additional beneficial owners is not excluded.
Example of an individual shareholder as the beneficial owner in several companies:
A shareholder owns a corporation 100 percent, and this company in turn owns another corporation 100 percent. The person is thereby the beneficial owner in both corporations.
Example of no beneficial owner among several shareholders:
Four shareholders each control 25 percent of the votes in a corporation, none reaches over 25 percent individually. Thus, none of them is a beneficial owner. The possibility of other beneficial owners is not excluded.
Challenge with foreign ownership:
A corporation is owned by a foreign company, but it is difficult to determine who controls the foreign company. Therefore, the corporation cannot unequivocally identify the beneficial owner.
