Beneficial ownership — the trickiest part

A beneficial owner is the natural person who ultimately owns or controls a customer. The threshold under the AML/CTF Act 2006 (Cth) and AML/CTF Rules 2025 is 25% or more ownership or control, directly or indirectly.

For a simple Australian proprietary company, identifying beneficial owners is generally straightforward — pull the ASIC company extract, identify shareholders holding 25% or more, and verify those individuals.

For trusts and layered structures, it becomes harder.

Trust → corporate trustee → directors → beneficial owners. A common pattern is a discretionary family trust whose trustee is a corporate trustee, which is itself a Pty Ltd owned by a holding company. To identify beneficial owners, you trace the chain: who controls the trust (typically the appointor), who are the trustees, who controls the corporate trustee (its directors and shareholders), and who ultimately owns the holding company. The beneficial owners are the natural persons at the end of that chain — and there can be more than one.

For unit trusts, unit holders with 25% or more are beneficial owners. For discretionary trusts, the appointor (or person with power to remove the trustee) is generally treated as a controller, and beneficiaries who have actually received material distributions may also need to be identified.

When ownership is opaque. If you cannot identify beneficial owners through documentation, you must take "reasonable measures" to verify, which can include requiring statutory declarations, obtaining certified extracts of trust deeds, or seeking independent legal advice. If reasonable measures still cannot establish beneficial ownership, the relationship cannot proceed and the matter should be considered for an SMR.

ECDD triggers from beneficial ownership. Enhanced due diligence is triggered when:

• A beneficial owner is a politically exposed person (PEP)
• A beneficial owner is from a high-risk foreign jurisdiction
• The structure appears designed to obscure ownership (multiple layers, nominee shareholders, opaque foreign entities)
• You cannot satisfactorily identify all 25%-plus owners

Many residential vendors and buyers are individuals, but every commercial transaction, every developer, and every investment buyer raises beneficial ownership questions that require tracing through corporate and trust structures.

What to do next: When taking on a corporate or trust customer, request the trust deed and ASIC extract before signing the agency agreement, and resolve the beneficial-owner chain before you start providing the designated service.