How does a reporting company report a Corporate Trustee as a beneficial owner?

For this question, a "corporate trustee" refers to a legal entity, not an individual, acting as a trustee in a trust arrangement.

If a reporting company’s ownership interests are controlled through a trust with a corporate trustee, the reporting company must determine if any individual beneficial owners of the corporate trustee indirectly own or control at least 25 percent of the reporting company’s ownership interests through their stakes in the corporate trustee.

For example:

• If an individual owns 60 percent of the corporate trustee, and the trust holds 50 percent of the reporting company’s ownership interests, the individual owns or controls 30 percent (60 percent × 50 percent = 30 percent) of the reporting company’s ownership interests, making them a beneficial owner.
• Conversely, if the trust holds only 30 percent of the reporting company’s ownership interests, the individual would own or control only 18 percent (60 percent × 30 percent = 18 percent) of the reporting company, and thus would not be a beneficial owner by virtue of ownership or control of ownership interests.

A reporting company may report the corporate trustee's name instead of individual beneficial owner information only if all three of the following conditions are met:

1. The corporate trustee is exempt from the reporting requirements.
2. The individual beneficial owner owns or controls at least 25 percent of the reporting company's ownership interests solely through their ownership in the corporate trustee.
3. The individual beneficial owner does not exercise substantial control over the reporting company.

In addition to evaluating the ownership interests, the reporting company must also consider whether any individuals associated with the corporate trustee exercise substantial control over the reporting company. The criteria for determining substantial control by an individual related to a corporate trustee are the same as for any other beneficial owner.

Related articles:  What happens when a company is owned by a trust? Who are the Beneficial Owners when individuals own or control the company through a trust?

Do Statutory Trusts, Business Trusts, or Foundations need to file FinCEN reports?

What is meant by substantial control?