Beneficial ownership
A beneficial owner is an individual who owns 25% or more of a business, or the one individual with significant control over it. Banks must identify and verify beneficial owners when a business opens an account.
Who counts as a beneficial owner
When a business opens an account, FinCEN's customer due diligence rule requires the bank to identify and verify its beneficial owners. There are two parts:
- Ownership: each individual who directly or indirectly owns 25% or more of the business.
- Control: one individual with significant responsibility to control or manage the business, such as a CEO, managing member or president.
The same person can meet both parts. Banks collect each beneficial owner's name, date of birth, address and identification number, and verify their identity.
Why it matters for cannabis businesses
Cannabis ownership structures can be complex, with holding companies, management agreements and investors spread across several entities. Banks need to see through those layers to the people behind them. State regulators often have their own ownership disclosure rules too, and the bank will expect its records to match the state's.
What operators can do
- Keep an up-to-date ownership chart showing every entity and individual, with percentages.
- Make sure ownership records filed with your state regulator match what you give your bank.
- Tell your bank before ownership changes, such as a new investor, a sale or a restructuring.
How Safe Harbor helps
Safe Harbor's onboarding team works through ownership documentation with each business, including multi-state operators with layered structures. Learn about the full due diligence process.
Related terms
Customer and enhanced due diligence · Bank Secrecy Act · Full glossary
This page is for general information only and is not legal advice. Last reviewed November 2026.