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#2220473 - 08/27/19 04:19 PM Beneficial Ownership Clarification-Question
jubank Offline
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Joined: Sep 2011
Posts: 11
XYZ, LLC was opened with a certification of two individual signers owning 10% and 16% of the company. However XYZ’s company agreement stated that another LLC (ABC, LLC) owned 90% and one individual (one of the signers) owned 10% interest of the company. The ABC, LLC was not indicated on the certification.

Based on the XYZ’s company agreement, do we need to request beneficiary ownership information on the ABC owners?

Thanks for clarifying.

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#2220489 - 08/27/19 04:56 PM Re: Beneficial Ownership Clarification-Question jubank
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 77,591
Galveston, TX
The authorized representative of the LLC is required to complete the BO certification. If you have other information on the company that conflicts with that information, then you might have a due diligence issue, but it is not an issue under BO.
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#2220628 - 08/28/19 08:38 PM Re: Beneficial Ownership Clarification-Question jubank
John Burnett Offline
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John Burnett
Joined: Oct 2000
Posts: 39,408
Cape Cod
Well, perhaps there is an issue. Under the BO regulation, §1010.230(b)(2), we see, at the end of that paragraph, this sentence:

"A covered financial institution may rely on the information supplied by the legal entity customer regarding the identity of its beneficial owner or owners, provided that it has no knowledge of facts that would reasonably call into question the reliability of such information."

That can be read to say that the bank in your case, has a duty to reconcile what's been claimed on the certification with what's in the company agreement.
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#2220698 - 08/29/19 06:43 PM Re: Beneficial Ownership Clarification-Question jubank
jubank Offline
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Joined: Sep 2011
Posts: 11
thank you for the feedback.

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