The beneficial owner: definition, identification and entities concerned

Last update: 24 March 2026 - consolidation and expansion of the complete guide

Do you run a company, association or other structure? The regulations on beneficial owners almost certainly concern you. Behind this technical term lies a simple requirement: to identify the individual or individuals who really control your entity. The stakes are high - criminal penalties, court injunctions - and the obligations have recently been extended to associations and foundations.

Who is behind the term «beneficial owner»?

The idea behind the notion of beneficial owner is simple on the face of it: it is a question of knowing who actually control or benefit from a legal structure, beyond appearances or sometimes complex arrangements. The law gives us a more precise definition.

The fundamental principle: always a natural person

The Monetary and Financial Code is clear: the beneficial owner is always one or more natural persons. Article L. 561-2-2 defines it as the natural person who ultimately either owns or controls, directly or indirectly, the client entity, or the entity for which a transaction is carried out or an activity carried out. So forget parent companies or holding companies as ultimate beneficial owners; the aim is to identify the individual or individuals who pull the strings or reap the benefits at the end of the chain.

Criteria for identifying a company's beneficial owner

For companies, which represent the majority of cases, the regulations provide precise criteria for identifying the beneficial owner(s). These criteria are not alternatives; they must be examined in order. Article R. 561-1 of the Monetary and Financial Code sets out these procedures in detail.

The first criterion is the ownership of capital or voting rights. A beneficial owner is considered to be any individual who directly or indirectly holds.., over 25 % of the company's capital or voting rights. This threshold of 25 % is the first indicator to be checked. The holding may be direct (the person owns the shares themselves) or indirect (they own them via one or more other companies they control).

If no one exceeds this threshold of 25 %, or if this criterion alone does not reflect the reality of control, the second criterion is examined: the exercise of a power of control over the company. by any other means. What does this mean in practice? The law refers here to certain definitions of control in the French Commercial Code (in particular article L. 233-3). This can cover several situations:

• A person who «in fact determines decisions at general meetings through the voting rights he or she holds». Think of a minority shareholder who, because the rest of the capital is dispersed or because of a shareholders' agreement, is able to impose his or her views.
• A person who has the power to appoint or dismiss the majority of the members of the management bodies (managers, members of the board of directors or supervisory board, etc.). This power may derive from the company's articles of association, an agreement or a de facto situation.

This second criterion therefore covers situations where a person, without necessarily holding a significant proportion of the capital, exercises a decisive influence over the management and decisions of the company.

Finally, what happens if, after examining these two criteria, no natural person can be identified as exercising control? Provided there is no suspicion of money laundering. Only in this case do the regulations provide for a «default» solution, as specified in paragraph 2 of Article R. 561-1 of the Monetary and Financial Code. The beneficial owner is then considered to be the legal director(s) of the company. Depending on the form of the company, this will be :

• Manager(s) (for SNCs, SCSs, SARLs, non-trading companies).
• The Chief Executive Officer (for public limited companies with a Board of Directors).
• The Chairman of the Management Board or the sole Managing Director (for public limited companies with a Management Board and a Supervisory Board).
• The Chairman and, where applicable, the Managing Director (for SASs).

If the legal representative is itself another company, we will then go back to the natural person who runs that company. This default designation is a solution of last resort to ensure that there is always an identified natural person.

What about other legal forms?

The legislator has laid down specific rules for other types of structure. Without going into excessive detail here, you should know that specific criteria also exist for :

• Collective investments (UCITS, FIA, etc.): the rules are similar to those for companies, with regard to share ownership or control over the management company (article R. 561-2 C. mon. fin.).
• Associations, foundations, economic interest groups The criteria include ownership of more than 25 % of the «capital» (if applicable), the right to become a shareholder, the power to appoint/revoke directors, or control by other means. Failing this, the legal representatives (president of the association, etc.) are appointed (article R. 561-3 C. mon. fin.).
• Trusts The identification covers the settlor, the trustee, the beneficiary and, where applicable, the protector (Article R. 561-3-0 C. mon. fin.).

These structures are therefore not excluded from the scope of application, even if the identification procedures have been adjusted.

Beware of complex situations: points that raise questions

Despite the clarifications provided by successive texts, certain situations remain tricky to analyse in practice. Two points deserve particular attention.

Firstly, how to calculate indirect ownership for the 25 % threshold? Imagine that person A owns 50 % of company B, which itself owns 50 % of company C. Is A the beneficial owner of C? Do the percentages have to be multiplied (50 % of 50 % = 25 %, so A does not reach the threshold of 25 %)? not the more than 25 %)? Or consider that as soon as A controls B (with 50 %), it indirectly controls what B holds (i.e. C's 50 %)? The first method, known as the «product of holdings» method, is the one generally favoured by the supervisory authorities (such as the ACPR and the AMF) in their past guidelines. The second, known as the «cascade» or control method, is less often used in this specific context. In the absence of explicit legal clarification on the calculation method, prudence often dictates following the regulators' approach (product of holdings) and documenting its calculation. In doubt? Better to consult.

Secondly, what if a listed company in the chain of ownership? Listed companies are exempt from the obligation to declare their own beneficial owners. But does this mean that the search stops if we «stumble upon» a listed company in the shareholding of an unlisted company? Logic and the objective of transparency suggest not. The listed company's exemption from reporting should not block the identification of the beneficial owner final the unlisted company, which remains subject to the obligation. In principle, therefore, it is still necessary to find out who controls the listed company in order to identify the individual at the end of the chain. However, obtaining this information may prove difficult. The situation merits careful analysis.

Is your company affected by these obligations?

A very broad field of application

The answer is yes for the vast majority of legal entities registered in France. Article L. 561-45-1 of the Monetary and Financial Code explicitly refers to :

• Companies with their registered office in France and legal personality (SARL, EURL, SA, SAS, SASU, SNC, SCS, SCA, non-trading companies such as SCI, etc.).
• Economic Interest Groupings (EIGs).
• Foreign commercial companies with an establishment in France.
• Other legal entities whose registration is required by law (for example, European Economic Interest Groupings - EEIGs - with their registered office in France).

The legal form does not matter, as long as the entity is registered with the Registre du Commerce et des Sociétés (RCS).

The recent extension to all associations and foundations

A major change occurred with the law of 22 April 2024 (known as the DDADUE law). Whereas previously only certain associations (those that issued bonds and had to register with the RCS) were concerned, the obligation to identify and retain information on beneficial owners has now been extended to all associations. extended to all associations governed by the law of 1901, as well as to foundationsto endowment funds and sustainability fund. These organisations will have to declare this information in addition to their other reporting obligations, via specific registers (such as the national register of associations). For a traditional association, the beneficial owner will very often be its president or principal legal officer. This is a significant change for the not-for-profit sector.

The major exception: listed companies

There is one important exception to this broad scope: the companies whose shares are admitted to trading on a regulated market in France, in the European Economic Area, or on a foreign market imposing equivalent transparency obligations, are excluded of this system for identifying and declaring beneficial owners (article L. 561-45-1 C. mon. fin.). It is considered that the disclosure and transparency obligations already incumbent on these companies (crossing of thresholds, information on directors, etc.) already provide sufficient visibility of their shareholding and control. However, this exemption only concerns the listed company itself, not necessarily its unlisted subsidiaries.

Registering beneficial owners

Obligation to register with the RCS

The main obligation is to declare this information to the Trade and Companies Register (RCS), The initial declaration must be made at the time of application for registration. The initial declaration must be made when applying for registration.

The information to be provided is precise: full identification of each beneficial owner (identity, date and place of birth, nationality, home address) and, crucially, the name and address of the beneficiary. exact description of the nature and scope of the audit (precise percentage of holdings, explanation of other means of control). Simply stating «more than 25 %» is not enough. For the practical details and deadlines of the declaration to the RCS, See our dedicated article.

Keeping information up to date

Any change concerning the beneficial owners (change of address, change in the percentage of control, departure or arrival of a beneficial owner) must be the subject of a an amending declaration filed with the registry within 30 days following the event. If there is no change, no annual steps are required.

Consulting the register: who has the right to see what?

Access to information is free of charge (article L. 561-46 of the French Monetary and Financial Code) but differentiated according to the status of the applicant.

Public access: a limited and evolving right

The general public can access limited information: surname, first names, month and year of birth, country of residence, nationality, and nature and extent of interests held. Data such as precise date and place of birth or home address are excluded.

This principle of public access has been questioned by the Court of Justice of the European Union (CJEU, 22 November 2022, Aff. C-37/20 and C-601/20, Luxembourg Business Registers), which ruled that generalised and unconditional access was disproportionate in terms of fundamental rights. France is maintaining public access pending legislative changes. The 6th anti-money laundering directive (Directive (EU) 2024/1640), to be transposed by July 2027, should clarify the arrangements.

Full access for authorities

Certain authorities have access to complete and unrestricted access to all information (article L. 561-46, paragraph 3, 2° of the Monetary and Financial Code, supplemented by article R. 561-57): magistrates of the judiciary, Tracfin agents, customs, tax authorities, judicial police officers, financial supervisory authorities (ACPR, AMF), professional bodies (lawyers, notaries).

Access for LCB-FT professionals

Professionals subject to anti-money laundering obligations (article L. 561-2 of the French Monetary and Financial Code) - banks, insurance companies, chartered accountants, statutory auditors, lawyers, notaries, estate agents - may access all information, but only within the strict framework of their due diligence measures (KYC procedures). They must draw up a signed declaration attesting to their status and purpose (article R. 561-58).

Penalties for non-compliance

Penalties applicable to the company and its directors

The system comes with significant penalties:

• The President of the Commercial Court may order under penalty to regularise the situation.
• Criminal penalties for managers : up to 6 months' imprisonment and a fine of €7,500, plus additional penalties (management ban).
• Penalties for the company : fine of up to €37,500, or even dissolution.

The direct obligations of the beneficial owner

An important innovation of the Order of 12 February 2020 is that obligations now apply directly to beneficial owners who are natural persons.

Article L. 561-45-2 of the Monetary and Financial Code requires the beneficial owner to provide the company with all necessary information so that it can meet its obligations, within a period of 30 working days (article R. 561-59).

In the event of refusal, delay or transmission of inaccurate or incomplete information, the beneficial owner is liable to :

• A legal action of the company to obtain an order under penalty (article L. 561-45-2, para. 3).
• From personal criminal sanctions 6 months' imprisonment and a fine of €7,500 (article L. 574-6 of the French Monetary and Financial Code).

Interactions and crossed responsibilities

The company must provide information on its beneficial owners to LCB-FT professionals who request it (article L. 561-45-1, paragraph 5). Failure to do so is punishable under criminal law (article L. 574-5).

To complete the system, LCB-FT professionals are required to report any discrepancies to the Registrar between the information in the register and the information they have gathered by their own means (article L. 561-47-1). This notification triggers a regularisation procedure.

Correctly identifying the beneficial owner(s) of your structure is a fundamental step in ensuring your compliance. If you have any doubts about your specific situation, our firm can help you to analyse your control structure and provide you with a detailed report. tailor-made legal support in commercial law.

Frequently asked questions

How do you identify a beneficial owner?

Find out whether any individual holds, directly or indirectly, more than 25 % of the company's capital or voting rights. If no one exceeds this threshold, examine who exercises control by other means (decisive influence over general meetings, power to appoint managers). Failing this, the legal director is appointed by default.

How do you declare the beneficial owner?

The declaration is made to the clerk of the commercial court when the entity is registered. It must include the full identity of the beneficial owner and a precise description of the nature and extent of the control exercised. Any change must be declared within 30 days.

What are the penalties for failing to declare?

The director risks up to 6 months' imprisonment and a fine of €7,500, plus additional penalties such as a ban on managing the company. The company is liable to a fine of up to €37,500, or even dissolution. The Commercial Court may also order the company to regularise its situation, subject to a fine.

Who is obliged to declare their beneficial owners?

Virtually all companies and entities registered in France (SARLs, SASs, unlisted SAs, SCIs, GIEs), as well as, since the law of 22 April 2024, all associations under the law of 1901, foundations and endowment funds. Companies listed on a regulated market are the main exception.

Do associations have to declare their beneficial owners?

Yes, since the DDADUE law of 22 April 2024, all associations governed by the law of 1901, foundations and endowment funds are subject to this obligation. The beneficial owner will usually be the association's chairman or principal legal officer.

Do I have to update my declaration every year?

No. An update is only necessary if there is a change (new beneficiary, change of address, change of control) within 30 days of the event.

Can the public consult information on beneficial owners?

Yes, but public access is limited to certain information (partial identity, nature of control). Competent authorities and LCB-FT professionals have more extensive access. The arrangements for public access are under discussion following the CJEU ruling of November 2022.

Does the beneficial owner have any obligations of his own?

Yes. Since the Order of 12 February 2020, the beneficial owner must provide the company with all the necessary information within 30 working days. If the beneficial owner refuses or provides inaccurate information, he or she is liable to 6 months' imprisonment and a fine of €7,500.

Where can I find a company's beneficial owner?

The information can be consulted at the commercial court registry via the register of beneficial owners. The INPI also centralises this data on its online portal.

Sources

• Monetary and Financial Code: articles L. 561-2, L. 561-2-2, L. 561-45-1, L. 561-45-2, L. 561-46, L. 561-47-1, L. 574-5, L. 574-6, R. 561-1, R. 561-2, R. 561-3, R. 561-3-0, R. 561-57, R. 561-58, R. 561-59.
• French Commercial Code: articles L. 123-1, L. 233-3.
• Law no. 2024-364 of 22 April 2024 containing various provisions for adapting to European Union law (DDADUE).
• Order 2020-115 of 12 February 2020 strengthening the national system for combating money laundering and terrorist financing.
• CJEU, 22 November 2022, Aff. C-37/20 and C-601/20, Luxembourg Business Registers.
• Directive (EU) 2024/1640 of 31 May 2024 (6th Anti-Money Laundering Directive).