On the 1st January 2018, new regulations came into force setting up the register of beneficial owners within the Registry of Companies. Companies must declare the identity of the ultimate beneficial owners (UBOs). This applies for UBOs having a share or controlling interest of more than 25%. If there are none, then the company has to indicate who the senior administrators are.
The regulations exclude companies where:
- They are listed on a regulated market and disclosure of beneficial owners is already required under the appropriate regulations; or
- All shareholders are natural persons disclosed to the companies registrar.
The First Schedule of the regulations sets out a form which is to be delivered together with the M&As whenever a new company is being set up. Declarations must be submitted for each beneficial owner. The declarations must include name, date of birth and nationality, identification details and country of issue of the passport or identity document. Failure to comply means that the Registrar will not register the company.
The regulations require the Registrar to keep a register for information on the beneficial owners. The information is not available to the general public except under payment of a fee to download the documents.
Update – December 2023:
A recent European court judgement has confirmed that having this information accessible by the general public is not strictly necessary or proportionate in terms of human law rights and thus, the ability to access beneficial owners’ information has now been limited to licensed entities and subject persons. Read the article here.
Companies must retain accurate, adequate and up to date information on all beneficial owners in compliance with the regulations. They must hold this information in a beneficial owners register which they keep at the company’s registered office.
Shareholders and UBOs are bound to provide the information without delay, even upon any change in the beneficial ownership or interest held. New shareholders shall not be registered unless they comply with this requirment.
Any changes in beneficial ownership must be notified to the registry within fourteen days. Companies must use the prescribed Form including all the information necessary. The same applies in the case of a transfer or transmission of shares, where this has entailed a change in beneficial ownership interest held. Notices of changes must be signed by at least one director or the company secretary.
Power of Authorities
The registry is authorised to exchange the information with tax and other competent authorities as well as to subject persons carrying out CDD in terms of the applicable regulations. Subject persons requesting such information may demonstrate their legitimate interest in obtaining such information, including on the basis of previous activities and proven track record. (Note – this might cause problems for new start-ups).
In exceptional cases where the beneficial owner risks exposure to harm owing to disclosure, such information should not be disclosed. Subject persons cannot rely exclusively on the register for CDD purposes. Furthermore, authorities across the EU will have the power to exchange information with each other.
Submission and Liability to fines for default
The rules subject access to information to online registration and a fee of EUR 5.00 for every access to the information on the beneficial owners of each company. Post 2022, this information is only accessible to subject (licensed) persons.
Default will expose every beneficial owner, shareholder, officer and the company jointly and severally to fines. Officers can only escape this where they have used all due diligence in order to comply with the rules and was not at fault for the failure.
This information is to be provided at every anniversary of each company after the initial submission. Notably, the rules also apply to commercial partnerships.
False or misleading statements can lead to hefty fines and / or imprisonment. The rules make provision for electronic submission. This enables subject persons to submit documents on time.
The Second Schedule lists down the applicable administrative penalties for failure to submit on time.