A beneficiary is a person who benefits from assets owned or managed by others. In the context of real estate, a beneficiary is considered to be someone who receives income from the ownership or management of real estate, without being its official owner. The term is also used in corporate law and financial assets, but it is often applied to real estate, especially in the context of trusts and trust management.

Types of Beneficiaries

Let's understand what types of beneficiaries there are.

Primary Beneficiary

The main beneficiary is the main beneficiary of an asset, whether it is real estate or a share in a company. It can manage the asset and make key decisions, such as leasing it out.

Conditional Beneficiary

A conditional beneficiary is a recipient who takes over its rights upon the occurrence of certain payment conditions. For example, if the main beneficiary loses its rights.

Beneficial Owner

A beneficial owner is an individual who has a significant stake in the company (usually 25% or more) and who controls the company's activities or real estate.

Rights and Obligations of Beneficiaries

Beneficiaries have the right to benefit from assets that they own indirectly. This means that they have certain rights to the asset, but they do not formally own the asset directly. The assets may be transferred to another legal entity or individual, but the actual owner is the beneficiary of the transaction. For example, an asset may be owned by a company, and the beneficiary controls this company through participation in its capital.

At the same time, beneficiaries are required to provide information about themselves and their status at the request of State authorities. This is necessary to comply with the anti-money laundering and terrorist financing legislation.

Applying the Beneficiary in Real Estate

In real estate, the beneficiary may be the person receiving rental income, while the manager is assigned to perform all operational tasks. For example, if a property is placed in trust, the beneficiary receives income, and the manager is responsible for the operation and maintenance of the property.

Legal Regulation And Requirements

The global practice of regulating the activities of beneficiaries is diverse. For example, the UK has introduced a system for registering" Persons with Significant Control " (PSC — Person with Significant Control). Any person who owns more than 25% of the company's shares, has the right to manage or has a significant influence on the company's activities, is required to disclose their data to the public register of shareholders.

In the United States, beneficial ownership is regulated by the Corporate Property Transparency Act, which requires companies to disclose information about ultimate beneficiaries who own 25% or more of the company's shares. The same rule applies in the European Union and applies to all EU member States.