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A beneficial owner is the individual or company with a claim to the advantages of a particular account, asset, or business organization. The Bank Secrecy Act (BSA) authorizes Financial Crimes Enforcement Network (FinCEN) to requrie that financial institutions obtain, record, and verify the identity of beneficial owners. Few business organizations are exempt from these requirements.
Financial institutions must collect the name, date of birth, and taxpayer identification number of the beneficial owner as assurance that someone will be held liable for any disputes, illicit transactions, or nefarious business activities that result from that particular legal entity. Individuals or companies who open a new account with a bank or credit union, broker or dealer, mutual fund, or engage in the business of trading futures or commodities, must provide documents to FinCEN.