Beneficial owner: how to identify and document it in an AML file

Identifying the client is rarely the hard part of an AML (PLD) file. The difficult part is usually a later question: who is, ultimately, behind that client? With the amendment to the Federal Law for the Prevention and Identification of Operations with Resources of Illicit Origin (LFPIORPI), published in the DOF on July 16, 2025, the concept of beneficial owner (beneficiario controlador) is now worded in more detail. In this article we review what the law says, where the information usually appears in documents, and which practices help document it.

What the law says

Article 3, section III, defines the beneficial owner as the individual or group of individuals who:

• directly or through a client or user ultimately obtains the benefit of enjoyment, use, exploitation or disposal of the good or service derived from an act or transaction with someone who carries out a vulnerable activity, or
• ultimately exercises effective control over the legal entity that, as client or user, carries out those acts or transactions, as well as the persons on whose behalf it enters into any of them.

The same section specifies that effective control exists when, through ownership of securities, by contract or any other act, a person or group can:

1. Impose, directly or indirectly, decisions at shareholders' or partners' meetings or equivalent bodies, or appoint or remove the majority of directors or managers.
2. Hold rights that allow them, directly or indirectly, to vote more than 25% of the share capital.
3. Direct, directly or indirectly, the management, strategy or main policies of the legal entity.

The law adds that the definition is equivalent to "ultimate beneficiary" and "real owner".

Why it matters for obligated parties

Article 18, section III, provides that when the client or user is a legal entity, trust or other legal arrangement, whoever carries out the vulnerable activity must collect documents or other officially recognized means of identification that allow its beneficial owner to be identified, in accordance with the general rules. If the client is an individual, their statement on whether or not they know of the existence of a beneficial owner must be collected and, where applicable, the documentation that allows that person to be identified.

Section IV of the same article adds that the information and documentation identifying clients must be kept, physically or electronically, for at least ten years from the date the vulnerable activity was carried out. In addition, the amendment added Chapter IV Bis, which requires commercial companies to respond to authorities' requests to determine their beneficial owner and to keep the information that supports it.

In practice, this means that writing down a name is not enough: the file must show where that conclusion comes from.

Where the information usually is

There is no single document that states who the beneficial owner is. It usually has to be reconstructed from several:

• Articles of incorporation (acta constitutiva). Show the founding partners or shareholders, the initial capital, the form of management and, often, the first appointments.
• Shareholders' meeting minutes (actas de asamblea). Reflect capital increases or decreases, share transfers, changes of managers and amendments to the bylaws. They update the initial picture.
• Shareholding structure. A current list of partners and percentages, ideally backed by the share registry book or by the minutes that support it.
• Powers of attorney (poderes). Indicate who can act on behalf of the company and to what extent. They help understand who runs the operation, although on their own they do not prove ownership.

Common difficulties

When reviewing files, some patterns recur:

• Chains of companies. When the majority shareholder is another legal entity, the chain must be followed until it reaches individuals. The definition refers to "direct or indirect" control, so stopping at the first level usually leaves the analysis incomplete.
• Outdated minutes. Articles of incorporation from years ago may not reflect the current structure. If later meeting minutes are missing, the ownership information may be wrong without anyone noticing.
• Representatives who are not owners. It is common to confuse the attorney-in-fact or sole administrator with the beneficial owner. The law treats directing management as a form of control, but also holding more than 25% of the votes or the ability to impose decisions at meetings. These are different questions that must be analyzed separately.

A conclusion about the beneficial owner is only as solid as the evidence supporting it within the file.

How a well-organized file helps

Documenting the beneficial owner is, above all, an exercise in order and traceability. Some practices we recommend:

1. Arrange corporate documents chronologically, from the articles of incorporation to the most recent meeting.
2. Record each relevant data point (partner, percentage, position, date) together with the document and page it comes from.
3. Build the ownership chain level by level until reaching individuals, flagging information gaps.
4. Explicitly separate who represents the company from who owns or controls it.
5. Once the individuals are identified, check them against blocked-persons and sanctions lists.

This is where assisted document review adds value. At Loony we extract each data point with the page and line it comes from and review the complete file, so inconsistencies between minutes, powers of attorney and shareholding structure become visible before a verification visit. For checking names against lists, AmigoApi allows screening against blacklists and sanctions lists. The final decision remains with the compliance team; our system gives it organized evidence to make it.

This article is for informational purposes only and does not constitute legal advice.

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