Beneficial Owner

Beneficial owner is a legal term which refers to a person who has the right to live in a property and use it as he/she wishes although he/she may not actually possess full ownership, for example a leaseholder.

The phrase however is becoming more and more common in stockmarket usage as a result of the growing importance of nominee accounts. In this instance the beneficial owner of shares owns shares held in trust by a nominee, which is usually a company set up for this purpose by a stockbroker.

You may wish to hold shares through a nominee account to reduce paperwork or save on dealing costs as the stockmarket moves to rolling settlement.

Remember, you may lose your rights to shareholders' perks, annual reports and your right to vote at annual and special shareholder meetings if you hold your shares in a nominee account.

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Last Updated: May 2007 © Moneyextra.com

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