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#2148710 - 10/04/17 08:00 PM Beneficial Ownership and Control Prong
ledfoot Offline
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Joined: May 2004
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Georgia
I've begun looking at some current accounts that are owned by legal entities and came across one that I'm not totally sure if I'm completing the sample BO certification form.
The account is a LLC owned by three individuals. Each one is listed as a Member/Manager of the LLC and each owns 33 1/3 interest in the LLC. I have all three individuals listed as BO. My question is on the control prong, even though each one signed the signature card and loan documents as Member/Manager, do I need to only list one individual as having significant responsibility for managing the entity or do I need to show all three since they equally share this responsibility?
Also, since they first opened a checking account and then a month later obtained a commercial loan for the LLC, would two certification be required since two accounts were opened? I'm thinking yes.
I'd appreciate some help with clarifying this.
Thanks
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#2148713 - 10/04/17 08:05 PM Re: Beneficial Ownership and Control Prong ledfoot
#Just Jay Online
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They, not you, need to pick one, or someone that may not even be them.

Come next May, yes, one certification for each account opening event. If you have already instituted this early, lord only knows why, I would state the same answer today.
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#2148715 - 10/04/17 08:08 PM Re: Beneficial Ownership and Control Prong ledfoot
BrianC Online
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The maximum number of "required" beneficial owners is five: Four owners and one controller. Depending on the structure of the business an owner can double as controller so only one of the three Members need be listed as a controller.

(Note that the Certification Form in the Appendix to the Final Rule only provides one space for a controller).

The final rule states that a certification is required every time a legal entity opening a new account. There are no exceptions carved out based on the length of time since the legal entity last opened a new account. It is possible that the beneficial owners changed in the last month. If the second certification lists the same beneficial owners, how you elect to perform verification on the owners since you just did so one month prior is a matter of you risk-based procedures.
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#2148716 - 10/04/17 08:10 PM Re: Beneficial Ownership and Control Prong BrianC
ledfoot Offline
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That's pretty much what I thought too. Makes me feel better to have clarification though.
Thanks!
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#2148731 - 10/04/17 09:04 PM Re: Beneficial Ownership and Control Prong BrianC
ledfoot Offline
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I did forget to mention one thing. On the certification form it ask the name of the person opening the account. Even though on the control prong, I'll only list one individual, if more than one person is actually opening the account and signing the signature card, would I still just list the name of the individual listed on the control prong or all individuals?
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#2148743 - 10/04/17 09:42 PM Re: Beneficial Ownership and Control Prong ledfoot
Sunshine Lady Offline
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Only one person has to sign the control prong no matter how many signers you have. So just chose one.
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#2148748 - 10/04/17 09:50 PM Re: Beneficial Ownership and Control Prong ledfoot
#Just Jay Online
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Originally Posted By ledfoot
I did forget to mention one thing. On the certification form it ask the name of the person opening the account. Even though on the control prong, I'll only list one individual, if more than one person is actually opening the account and signing the signature card, would I still just list the name of the individual listed on the control prong or all individuals?


The person opening the account is the person sitting in front of you and may not be any one of the previous beneficial owners or the one with control. This could very well be a sixth individual on your certification. If more than one come in together, again, I would have them just pick one of themselves to designate as the open and to sign.
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#2151642 - 10/30/17 04:38 PM Re: Beneficial Ownership and Control Prong ledfoot
Mel in WA Offline
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What if each individual/entity owns less than 25%? I'm currently looking at an entity where everyone owns 16.7%. Do we only identify the person with control and that's it?

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#2151648 - 10/30/17 04:59 PM Re: Beneficial Ownership and Control Prong ledfoot
BrianC Online
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As long as your policy and procedures say 25% for the ownership prong, if no one meets that threshold you are only required to identify one controller.

For institutions that have a policy to identify at 10%, then you are identifying six owners and one controller.
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