Complex ownership and control structures in AML checks
Last updated: July 30, 2026
When a prospective client has a layered company, partnership, or trust structure, accountancy firms must establish which individuals ultimately own the client and who can direct its affairs.
AML compliance work also needs to show why the arrangement exists and whether it makes commercial sense in relation to the client’s activities.
Therefore, for complex ownership reviews, the practice should set a clear process for gathering evidence, checking conclusions, and escalating unresolved issues before the relationship proceeds.
Key takeaways
- Firms should map the material ownership and control routes, recording how each route leads to a natural person or why any link remains unresolved.
- Decision-making power should be assessed separately from financial ownership.
- Each material connection should be supported by evidence appropriate to its complexity and risk.
- The client-level AML review needs to address whether the structure has a credible purpose that fits the client’s business and expected activity.
- Any uncertainties, conflicting information, and reasons for the practice’s conclusions should be documented clearly.
- When significant gaps prevent a reliable assessment, the matter should be paused and escalated in accordance with the practice’s procedures.
What makes an ownership or control structure complex?
Complexity can arise when ownership passes through several legal entities or arrangements, especially across different jurisdictions. Transparency issues can also occur when ownership and control follow different routes.
Additional legal layers and professional intermediaries can distance the client from the individuals involved, while apparently dispersed ownership may conceal concentrated influence.
The required AML judgement is contextual, as several layers can be commercially normal for an international group, yet difficult to justify for a small trading company with straightforward activities.
Nonetheless, entity count alone is not determinative because commercial plausibility matters.
Analysis of ultimate ownership and control in complex structures
The analysis should be based on a current chart showing the full chain of ownership and control. Each entity’s legal characteristics should be documented, and every branch beyond the client’s immediate shareholder should be examined until the relevant individuals are identified.
If an interest spans multiple layers, the indirect holding or calculation should be recorded, and any uncertainty or unresolved link needs to be clearly explained in the CDD documentation. Firms should also consider whether any recent beneficial ownership changes require the AML assessment to be revisited.
Practical takeaway: While a client-supplied chart helps direct enquiries, it does not prove the structure. As a result, the retained evidence should allow a supervisory body to reconstruct the reasoning and understand how the conclusion was reached.
Control rights outside of share ownership
Shareholdings are just one way to exercise control, as contractual rights over governance can change the analysis. Moreover, control could sit with a person or entity in a governance or fiduciary role, or arise through coordinated or informal influence.
| Route being checked | What the review is trying to establish |
|---|---|
| Legal ownership | Who holds the shares, partnership interest, or other economic rights |
| Indirect ownership | Whether those rights pass through another entity or arrangement before reaching an individual |
| Governance rights | Who can appoint directors, approve decisions, or otherwise direct the client |
| Fiduciary or management powers | Whether trustees, general partners, managers, or similar roles control the arrangement |
| Final AML conclusion | Whether the individuals with ownership and those with effective control have both been identified |
Evidence standards for complex ownership and control structures
Each key link in the chain should be corroborated using sources whose quality has been assessed.
This often means starting with public or official records, such as UK or overseas registry extracts to verify an entity’s legal status and recorded ownership. If those records only give part of the picture, registers of members and key constitutional or contractual documents can help identify interests or rights that do not appear on the public register.
For trusts, documentation or credible professional confirmation can clarify the powers operating within the arrangement. If control remains unclear, governance records often help when they demonstrate how control is exercised.
Public or registrar records can also provide useful support, but they cannot be relied on alone to satisfy the practice’s duty, especially if overseas records are difficult to access or depend on unfamiliar legal features.
In particular, a register entry showing a person with significant control does not necessarily establish the beneficial owner under the Money Laundering Regulations, particularly where control is indirect or arises by other means.
The ownership and control record should therefore set out the analysis, how discrepancies were resolved, and why the evidence was judged sufficient.
AML risk indicators in complex ownership structures
Complexity deserves greater weight when it appears unusual or excessive for the client’s business.
AML concerns should arise if the client cannot give a coherent reason for the structure or the explanation does not fit their profile or expected activity.
Jurisdictional features can also reduce transparency when dependable ownership information is unavailable or obscured. Similar opacity can result from nominees and unnecessary intermediaries, particularly when they make the underlying individuals less visible.
The AML risks increase further if the client’s explanation, records, and ownership history do not hold together, especially if the structure does not match expected fund flows.
These indicators should be considered alongside the statutory risk factor for complexity. Yet, by itself, complexity is insufficient to make every layered client high risk and thus, must be weighed against the relationship as a whole.
Any additional investigative enquiries should be reflected in the risk rating and, where appropriate, the case should be referred to the money laundering reporting officer (MLRO) or another senior person.
If those enquiries lead to a high-risk assessment, enhanced due diligence applies. Source of funds or source of wealth checks should follow only if the identified risks make them necessary.
Unclear ownership or control in customer due diligence
When material gaps remain, the practice should pause the matter and escalate it under its AML procedures. The recorded note should identify the unresolved issues and explain whether a defensible conclusion could be reached.
Those gaps can mean the beneficial owner still cannot be identified after all reasonable steps. In that limited situation, the practice can identify a senior managing official instead, such as a director or other person responsible for managing the client.
When that fallback still does not allow the required customer due diligence to be completed, the general statutory position prevents the practice from proceeding with the business relationship or transaction.
The circumstances can also require escalation for consideration of a suspicious activity report.
Separately, a material discrepancy involving a person with significant control or a registrable beneficial owner could create a separate Companies House reporting duty.
In summary
The documented ownership and control review should explain three key factors: who owns the client, who exercises influence, and how the practice verified each material part of the structure.
The retained CDD materials should also show how the commercial explanation and any transparency concerns affected the client risk assessment. These conclusions should then feed into the firm’s ongoing monitoring procedures.
Ultimately, this gives accountancy firms a defensible basis for the next decision on the relationship, with any further enquiry or escalation linked back to the evidence retained.
FAQs
Risk depends on the client’s circumstances. A multinational group might have sound commercial reasons for using a layered structure, but closer attention might be needed when a smaller trading business cannot explain the arrangement’s purpose. A relevant consideration is whether the structure fits the client’s activities and whether the people who ultimately own or control it can be identified.
The review should address not only ownership percentages but also who can direct important decisions. Relevant evidence might include an agreement giving someone appointment rights or documents showing who controls a general partner. The ownership and control positions should be considered separately, especially when a person’s influence appears greater than their financial interest.
The enquiry should be supported by other credible evidence explaining the entity’s legal status, ownership, and control. If public records are limited, constitutional documents or confirmation from an appropriately qualified professional can provide support. The reliability of that evidence should be assessed in its proper context. An important link that remains unclear can justify internal referral and specialist advice.
PSC information can support the firm’s enquiries, although it may not provide the complete picture. The PSC entry might not identify the individual who qualifies as the beneficial owner, especially if influence is exercised indirectly. The register should be evaluated alongside the wider evidence about ownership, governance rights, and actual control.
Checks should reflect the risks identified in the client relationship, as complexity alone does not make them necessary in every case. Further enquiries can be appropriate when the structure has no clear commercial explanation, conflicts with the client’s expected activities, or makes the movement of funds difficult to understand. The scope of the checks should match the concern identified.
This fallback can only be used when every viable step to identify the beneficial owner has failed. A delayed or incomplete response from the client does not by itself satisfy that condition. Material uncertainty about ownership or control should result in the matter being placed on hold, with the outstanding point documented and the firm’s internal escalation process followed.
References and Source Material
- HMRC, Risks common to accountancy service providers
- Money Laundering Regulations 2017
- CCAB, Anti-Money Laundering, Counter-Terrorist and Counter-Proliferation Financing Guidance for the Accountancy Sector
- Companies House and DBT, People with significant control requirements
- Companies House, Report a discrepancy about a PSC or registrable beneficial owner
- FATF, Guidance on Beneficial Ownership of Legal Persons
- FATF, Guidance on Beneficial Ownership and Transparency of Legal Arrangements
