A simple definition of beneficial owner is a natural person who ultimately owns or controls a company.

To identify the beneficial owner in a non-profit company, do the cascade test. In particular, employ Step 2 which identifies the beneficial owner as the one who has Ultimate Effective Control which points to it being the board of directors as they have the power to appoint or remove directors or determine the policy of the company.

The cascade test is a test for identifying who is the beneficial owner. It has 3 steps:

1. Step 1 is the primary method to first identify all individuals who ultimately have a controlling ownership interest (25% or more) in the company, either directly (in their own names) or indirectly ( through a chain of other entities or arrangements). In essence, this amounts to who has the Ultimate Ownership.

2. Step 2 is the second method of identifying who is the beneficial owner. Where there is doubt as to whether the persons with the controlling ownership interest are the beneficial owners, or where no natural person exerts control through ownership interests then, the beneficial owner shall be the natural persons (if any) exercising control of the legal person through other means. This amounts to Ultimate Effective Control.

Step 3 is the third method for identifying who is the beneficial owner. Where no natural person is identified under the previous steps, companies should identify and take reasonable measures to verify the identity of the relevant natural person who holds the position of senior managing official. This amounts to the Highest Management Authority.

You identify a beneficial owner in a company with shares by identifying the individuals who has ultimate ownership interest (25% or more issued shares or voting rights).

The cost to file the Beneficial Ownership Return Form A and Form B is $3,000 each, and the cost to file the Beneficial Ownership Return Form C is $6,000 when incorporating a new company and when filing changes for the particulars of directors and the company.

The Company (Amendment) Act 2023 requires that all registered companies must file the Beneficial Ownership information for the company.

These changes have become effective as of April 24, 2023

As it relates to the Beneficial Ownership regime in Jamaica you may visit the Companies Office of Jamaica (COJ) website at https://www.orcjamaica.com/, or the office itself for more information, or look out for physical and electronic media publications by the COJ.

For general information on beneficial ownership, you may also visit the Financial Action Task Force (FAFT) website at https://www.fatf-gafi.org/en/home.html

You may also see articles written on Beneficial Ownership on the News Section of this website.

• The COJ will no longer impose the Section 121 annual return fines. There will only be late costs assessed.

• New authority for the Registrar/COJ to conduct investigations to confirm beneficial ownership information.

• ALL companies, including for-profit and nonprofit, will need to identify their beneficial owner(s). For corporations holding shares, the bar for beneficial ownership have been reduced from 50% to 25%.

• The COJ will now have to be notified of any changes in beneficial ownership and membership information.

• The date of birth, identification document and tax registration number will not be collected for all members and beneficial owners.

It is mandatory for overseas companies to provide beneficial ownership information. Overseas companies are to submit a copy of their certificate of incorporation with a beneficial ownership return form.

Ultimate ownership is the highest level of ownership or control over an asset. A beneficial owner is considered the ultimate owner as they receive the benefits of an asset, such as profits or income, even if legal ownership is held by another party.

Ultimate control refers to the highest level of control over an asset or entity, typically held by the person or group that ultimately decides how the asset or entity is managed or used.

In the context of beneficial ownership, ultimate control refers to the individual or entity that ultimately has the power to direct the management or disposition of a particular asset or company, regardless of legal ownership. A beneficial owner is typically the true owner of an asset, even if legal ownership is held by another party.

The highest position of authority refers to individuals who have effective control of the management of a company, such as Senior Managing Officials i.e. CEO’s, General Managers, and Operation Managers.

This means the information that is provide to the Registrar should be correct in all details, truthful, exact and current.

Name, Date of Birth, ID/Taxpayer Registration Number, Address, Occupation, Nationality

Where the ID is not available, a driver’s license number or Taxpayer Registration Number must be provided. The obligation is on the officers/officials of the company to maintain accurate and up to date information. The Form 5A must be filed with the COJ with a cop of the updated identification document.