Definition:
Ultimate Beneficial Owners (UBOs) are individuals who ultimately own or control a business entity, even if their ownership is indirect or concealed through corporate structures.

Contextual Explanation:
Identifying UBOs is a key requirement under anti-money laundering (AML) laws to prevent financial crimes such as fraud and tax evasion. PSPs, MSBs, and financial institutions must conduct UBO verification as part of their Customer Due Diligence (CDD) and Enhanced Due Diligence (EDD) processes.

Why It Matters:
Failure to identify UBOs can expose businesses to compliance violations, legal consequences, and financial crime risks. Regulators like FINTRAC mandate UBO verification for high-risk transactions and corporate clients.

Example:
A PSP onboarding a corporate client must verify the individuals who ultimately own or control 25% or more of the company’s shares, ensuring compliance with PCMLTFA regulations.