Effective Control is a term that describes the powers that a person or position has within an organisation. We are obliged to verify the identity of all persons with Effective Control of an organisation.
The exact people deemed to have Effective Control will be different, depending on the type of organisation (e.g. Charity, School, Business, etc.) and from case to case.
There are no hard-and-fast rules, but typically people with effective control include:
- People who will have access to, or control of, funds raised
- Board of Directors
- Natural persons who have more than 25% shareholding (directly or indirectly)
- Anyone else in a position to have significant influence over your management or administration of your organisation. (E.g. a chief executive or a chief financial officer)
A good rule of thumb is to ask two questions “Could this person access the funds?” and “Could this person wind-up the organisation?”. If the answer to either is “yes” then they probably have effective control.