What are examples of Business Ownership Documents?

Definitions

• Ultimate Beneficial Owners (UBO): Individual or entity that has complete ownership and control over a business, institution, or legal entity
• Control Person (if different than the Ultimate Beneficial Owners): an individual with significant responsibility to control or direct business; typically an executive officer (CEO, CFO, COO, President) or Director

 

 

Ownership Document Requirements

• 25% ownership or more. We are required to confirm all individual ultimate beneficial owners who own 25% or more of the underlying entity
• Self-generated documents confirming shareholders should be dated and signed by a Lawyer or third party CPA
  • Detailed capitalization tables clearly produced by well-known equity management companies (e.g. Carta, AngelList, or Securitize) do not require a signature from a Lawyer or third party CPA
• Please ensure that 100% of ownership can be derived or clearly accounted for in the document
• If the entity is owned by another entity (or multiple entities), we will require similar documents verifying the subsidiaries’ shareholders
• Please ensure the document lists the name of the entity it pertains to
• Generally speaking, if the entity does not have individual beneficial shareholders, we will need to confirm the individuals who significantly control the entity instead, such as its directors and officers

 

 

Acceptable Ownership Documents By Entity Type

1.  
   Sole Proprietorships
   • Business License–listing the sole proprietor as the owner
   • Trade Name Registration (DBA)--indicating the owner if the business operates under a different name
   • Tax Filings: Individual tax returns (Schedule C) showing business income and expenses reported by the sole proprietor
     
     
2.  
   Partnerships
   • General Partnerships (GP)
     • Partnership Agreement–listing the partners and their respective ownership interests
     • Certificate of Partnership–if the partnership is registered, listing the partners
     • Trade Name Registration (DBA)--including information on the multiple partners
   • Limited Partnerships (LP)
     • Certificate of Limited Partnership–filed with secretary of state or similar government body, naming the general and limited partners
     • Limited Partnership Agreement–detailing the ownership structure, roles, and contributions of each partner
     • Schedule of Partners–listing all partners and their ownership percentages
     • K-1 Forms–issued to partners for tax purposes, showing their share of profits or loss
   • Limited Liability Partnership (LLP)
     • Registration of Limited Liability Partnership–filed with secretary of state or similar government body, listing the partners
     • LLP Agreement–listing the partners and their ownership interests
     • K-1 Forms–for tax filings, indicating the limited partner’s’ share of profits or losses
       
       
3.  
   Corporations
   • Articles of Incorporation–listing the shareholders
     • Note: control persons (directors/officers) listed without shareholders are not sufficient. Please ensure that this document confirms the entity’s shareholders, which are not necessarily one in the same as the entity’s directors, officers, or incorporators
   • Stock Certificates–issues to shareholders, representing ownership in the corporation
   • Shareholder Ledger or Cap Table– listing all shareholders and their ownership percentages
   • Shareholders' Agreement–listing shareholders and their ownership percentages
   • Board Meeting Minutes–listing shareholders and their ownership percentages
   • SEC Filings (for public companies)--including information on significant shareholders and controlling parties
   • K-1 Forms–provided to shareholders, showing their share of the corporation's profit or loss
     
     
4.  
   Limited Liability Company (LLC)
   • Articles of Organization–filed with the secretary of state or similar government body, sometimes listing the members (owners)
   • Operating Agreement–detailing the ownership structure, members' contributions, and percentages of ownership interest
   • Membership Certificates–issued to members to represent their ownership interest in the LLC
   • Membership Ledger–internal document tracking all members and their ownership interests
   • K-1 Forms–provided to members, showing their share of the LLC's profit or loss
   • IRS 147(c) EIN Letters–for sole-member LLCs
     
     
5.  
   Nonprofit Organization

    

   Nonprofit Organizations usually do not have individual beneficial shareholders. We are required to confirm control person(s) instead.

   • Articles of Incorporation–filed with the secretary of state or similar government body, listing directors or founders
   • Bylaws–defining the governance structure, listing directors and officers
   • Board Meeting Minutes–documenting decisions and changes in the controlling parties, board members, directors, and officers
   • IRS Determination Letter–confirming the nonprofit's tax-exempt status including details on controlling parties
   • Annual Reports–filed with the secretary of state or similar government body, listing current directors and officers
     
     
6.  
   Foundations

   Foundations usually do not have individual beneficial shareholders. We are required to confirm control person(s) instead.

   • Articles of Incorporation–filed with the secretary of state or similar government body, listing initial directors or founders
   • Trust Documents–establishing the foundation, listing trustees or board members
   • Bylaws–defining the governance and control structure
   • Board Meeting Minutes–detailing the actions and changes in the foundation's controlling parties
   • IRS Determination Letter–confirming the nonprofit's tax-exempt status including details on controlling parties
   • Annual Reports–filed with the secretary of state or similar government body, listing current directors and officers
     
     
7.  
   Decentralized Autonomous Organizations (DAOs)
   • Membership Agreements–outlining the ownership percentages of members or token holders
   • Voting Records–documenting decisions and controlling parties based on token voting or other consensus mechanisms
   • Other Documents:
     • White Paper
     • Membership or Token Agreement
     • Governance Framework
       
       
8.  
   Trusts
   • Trust Deed–establishing the trust and outlining the roles of the trustors, trustees, beneficiaries, and terms of the trust
   • Certificate of Trust–proving the existence of the trust and the trustee's authority
   • Notarized Trustee’s Affidavit–confirming the identity and authority of the trust parties
     
     
9.  
   Cooperatives
   • Articles of Incorporation–filed with the state, establishing the cooperative listing its members
   • Membership Agreement–outlining the terms of membership, rights, and responsibilities of cooperative members
   • Membership Ledger–listing all members and their ownership stakes or voting rights
   • Members’ Meeting Minutes–documenting decisions made by the members and any changes in membership or control
   • Share Certificates (if applicable)--representing ownership stakes or member contributions in the cooperative

 

 

Other Forms of Business Ownership Documents

 

Use this section as a guide for other potential options to confirm ownership when the other suggested documents are not available or sufficient in order to confirm the individual beneficial ownership of the entity

• Ownership Org Charts–visually detailing complex ownership structures along with the shareholding percentages of each unit
• Signed Ownership Attestation Letter–confirming ultimate individual beneficial owners and their ownership percentages, signed by a Lawyer or third party CPA
• Capitalization Table–listing the names of shareholders and their ownership percentages signed by a Lawyer or third party CPA
  • Detailed capitalization tables produced by well-known equity management companies such as Carta or Angellist do not require a signature from a Lawyer or third party CPA