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Beneficial Ownership Certification – What It Is and What It Means for Businesses

On May 11, 2018, a new federal regulation designed to help fight financial crimes will go into effect requiring all financial institutions to obtain information verifying any beneficial owner(s) of business accounts opened by a legal entity such as an association, corporation, partnership, etc.

What This Means for Sterling Clients.

This means that any time an account is opened on behalf of a legal entity, Sterling National Bank will request information identifying all beneficial owners and controlling parties as described below.

Beneficial owners are defined as:

  1. Any individual who owns 25 percent or more of the equity interests of the legal entity customer (e.g., each natural person who owns 25 percent or more of the shares of a corporation).
  2. An individual with significant responsibility for managing the legal entity customer (e.g., a Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, Managing Member, General Partner, President, Vice President, or Treasurer).

What information Is Required?

The required identifying information includes name, address, date of birth, Driver’s License or Passport number, Social Security Number (as applicable) and other information that will help identify those individuals. It should be noted that:

  • Neither the beneficial owner(s) nor the individual with significant responsibility need to be present when opening an account; the person opening the account must complete the Certification Regarding Beneficial Ownership of Legal Entity form with the required information.
  • This form is not required for sole proprietorships, unincorporated associations, or natural persons opening accounts on their own behalf.

This information will be collected even if the person identified is not a Sterling client. It will also be collected for existing business clients who establish new accounts.

How will Sterling Handle the Beneficial Ownership Information?

We understand the information requested is sensitive; however, as always, we will treat all information collected with the utmost care, securely stored and handled with the same standard of privacy that we have always maintained.