Legal owner
At first sight, the meaning of this term is obvious, but a closer look reveals some possible confusion, which requires explanation to avoid misunderstanding.
By definition, legal owner is the owner of a property recognized by the laws, having the ultimate control over the property. The legal owner has legal title of ownership to the property.
Legal owner of property
As outlined above, the legal owner is the person who holds legal title to a property, even if such person is not fully in control of the property, because certain rights are exercised by the beneficial owner, who is the recognized before the world as the owner and has the right to use or even obtain profits and enjoy benefits of the property, while the legal title belongs to someone else. This is the situation in the case of life tenancy, when the so called “life tenant”, which is also called beneficial owner, is in control of the property.
Legal and beneficial ownership are often separated.
Legal owner of an automobile
The legal owner of an automobile is the one who has legal title of ownership to the car. It is possible that such person does not use the car but the right of use is transferred to another person, who is called registered owner of the car. The registered owner bear full liability for anything related to the car. This situation arises when there is a lien on the car, which typically arises from a loan or any other obligation. The legal owner may repossess the car if the registered owner defaults on any of any condition, either contractual or statutory.
Legal owner of a corporation
The legal owner of a corporation may be different from the actual beneficiary of the corporation. In this context, the legal owner is the one who is registered in the ledger of shareholders only in order to hide the identity of the real owner, who has the power to buy or sell the shares in the corporation simply by giving instruction to the legal owner.
A comparison between the legal and beneficial owner shows, at first sight, that the actual power of disposition belongs to the legal owner. This is true for most cases, especially the last one, where the legal owner is nothing more than a so-called strawman without any power over the corporation, except as instructed by the beneficial owner.
This situation may also arise in connection with a bank account, where the account holder may be different from the one who has actual power of disposition of the bank account. This latter is called “ultimate beneficiary”, which is frowned upon in the light of the fight against money laundering, as the ultimate beneficiary may dispose of funds generated by criminal activity.
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