A person who benefits from ownership even while the title to various types of property is held by someone else is said to be the beneficial owner.
It also refers to any person or group of people who, directly or indirectly, have the ability to vote or have an impact on the decisions made in relation to a particular security, such as shares of a firm. For instance, even though the title is held by the bank or broker for security and convenience, the genuine owner is the beneficial owner when securities are held in street name by a broker or custodian bank.
A person who benefits from ownership even while the property’s title is held by someone else is known as a beneficial owner.
Legal ownership and beneficial ownership are two different things, even though they typically refer to the same person.
For simplicity and safety, publicly traded securities are frequently registered under the name of a broker.
Trusts are frequently used by wealthy people at danger of legal action to represent themselves as the legitimate property owner.
Legal ownership is distinct from beneficial ownership. The legal and beneficial owners of a property are typically the same person, although there are numerous situations—some legitimate, others less so—where the beneficial owner may prefer to remain nameless.