Who is the beneficiary? What does this word mean and where did it come from?

Modern life introduces many foreign words into everyday life. One of these terms is often used in insurance, law and banking, although its general meaning is intuitively clear. It's about the word "beneficiary". This concept is often found on the pages of special editions. Let's try to understand its meaning.

Basic definition

Wikipedia and various encyclopedic dictionaries give us the following definition of this concept: a beneficiary is a person who is the final recipient of a certain cash payment. The basis for receiving funds is a debt document or contract.

Origin of the concept

Presumably the word originates from the French language. The original word means benefit, monetary gain, profit. In turn, the French word has Latin roots - the Latin bene is translated as "benefit". Thus, the beneficiary can be called a beneficiary.

Beneficiaries in real estate

This term has other meanings as well. For example, in civil law, a beneficiary is an entity that benefits from the rental of real estate, in other words, a rentier. This can also be called people who have transferred the rights to manage their property to third parties. In this case, the ultimate beneficiary is a person who receives income, but does not participate in management. In the case of a business enterprise, this can be called the owner, who transferred the rights to the director or manager, and he simply receives income from the activities of the company.

Beneficiaries in insurance

In the insurance business, there is the concept of "ultimate beneficiary". This is the person in whose favor the insurance payment will be made. In case of various surprises and illnesses, the beneficiary is usually the person whose health and property is insured. In accidents or sudden death, another person is named as the beneficiary - usually close relatives or friends of the deceased.

Beneficiaries in banking

In some cases, the beneficiary is a depositor of a particular bank. So in the contracts are called the owners of documentary letters of credit, persons indicated as recipients of bank certificates, or those who receive collection payments.

Business area

In contracts governing the economic activities of an enterprise, the beneficiaries of a legal entity are those who directly own the enterprise. Usually this is a list of individuals who enjoy the rights of owners or owners of the company. The receipt and distribution of net income can be carried out both by the beneficiaries themselves and by intermediaries acting in their interests. At the same time, the legal ownership of the company's assets may belong to a completely different person or even a competing company. This is how paradoxical situations arise in the market when companies owned by one person are fiercely competitive for sales markets.

Sometimes it happens that the beneficiaries are the founder or several founders who actually own the company, but do not manage it. Often top managers for this job are hired on the side and used in temporary, albeit very well-paid positions. In this case, the manager of the company assumes all the risks of the development of the enterprise, its success and expansion. In case of success, interim managers receive a large profit, in case of defeat - an indelible stain on their professional reputation.

The ultimate beneficiary is a person whose personal data is available only to the financial institution that the company uses. Therefore, the true ownership of many economic enterprises can be so difficult to prove. In any case, the beneficiary is an individual. It cannot be any organization or voluntary society.

The owners of securities are often the beneficiaries. The right to own other people's assets belongs directly to him. As the owner of securities, the beneficiary has the right to participate and vote in the meetings of the joint-stock company, to elect the management of the company. As a holder of securities, he takes part in various activities of his own company.

Publicity of the beneficiary

In many countries, the names of the real owners of enterprises, companies and large trusts can be found in public registers posted on government websites. This is how the public controls the owners of continental corporations themselves, preventing them from joining oligarchic unions. On the other hand, there are many legal tricks that allow you to use income in the conditions of anonymity. In the so-called offshore countries, special local laws have even been developed that allow owners of large capitals to use their money, while remaining unknown.