A beneficial owner refers to an individual or a collective group that reaps the advantages of property ownership, despite the legal title being registered under a different name. This term further encompasses those who possess either direct or indirect control over voting rights or the capacity to direct transaction decisions about certain securities, such as company shares.
In the case of a company, the shares of the company may be held by an individual. However, this individual is merely holding the shares in his or her name for another person. In this case, the legal title of the shares is held by this particular individual. However, the person who will benefit from the shares, be it when it is sold or the ability to vote, is another person. This other person is deemed to be the beneficial owner of the shares.