FIBO — Legal Entities, Ownership & Control

Drilling into FIBO Business Entities (BE)

Lesson 1 framed FIBO as finance's standard library. Now we go deep on the module a data professional touches most for KYC, risk and regulatory reporting: BE — Business Entities, and specifically ownership and control.

The class backbone

FIBO distinguishes ideas a home-grown model usually conflates:

• LegalPerson — an entity the law treats as a person (a company, a fund). Distinct from a LegalEntity, which is the broader notion of something with legal standing.
• AutonomousAgent / Party — FND-level abstractions that let a person and an organisation both play a role in a contract without pretending they're the same kind of thing.
• Roles vs players — FIBO models a party in role (e.g. the borrower role an organisation plays in a loan) separately from the organisation itself. The same legal person can be a borrower in one contract and a guarantor in another.

Ownership vs control — not the same relation

Regulators care about both, and they differ:

• Ownership is about equity — who holds shares, and how much.
• Control is about power — who can direct the entity, which can exist with little or no equity (via voting agreements, board seats, golden shares).

FIBO gives you separate properties for each (illustratively hasOwnership / isControlledBy) so 'A owns 30% of B' and 'A controls B' are independent, queryable facts.

Why this is a reasoning problem

Control is often transitive: if A controls B and B controls C, A indirectly controls C. Declare the control property transitive in OWL and a reasoner walks the whole chain for you — no recursive SQL, no hand-maintained closure table. That inferred chain is exactly what beneficial-ownership and concentration-risk reports need.

Use Case Example: A bank must find the ultimate beneficial owner of a corporate client buried under three holding companies. Modelling each tier with FIBO control relations and marking the control property transitive lets a reasoner surface the top of the chain automatically — the same dataset then answers 'how much total exposure do we have to anything that entity controls?'

Ownership vs control is the shareholder vs the steering wheel. You can own a sliver of a company's shares yet sit in the driver's seat through a voting agreement and three board seats; you can own a huge passive stake and steer nothing. FIBO refuses to glue the seat to the shares — it keeps 'who holds equity' and 'who can turn the wheel' as separate dials, because regulators audit each one on its own.

An indirect control chain a reasoner can close

Mark the control relation transitive and the engine infers the dashed top-to-bottom link no one stated explicitly.