The deadline in which all legal entities registered in the Commercial Register have to their beneficial owners in so called register of beneficial owners will expire in less than one month. Is your company ready to fulfil this obligation?
The amendment to the Act on Selected Measures against Legitimization of Proceeds of Crime and Financing of Terrorism (hereinafter as “AML Act”) and Act on the Public Registers of Legal and Natural Persons (hereinafter referred to as “Registers Act”), have brought new obligations for all legal entities. These new obligations are based on (i) maintaining internal evidence of data on their beneficial owner and (ii) entering the data in a non-public register.
Determination of beneficial owner has been mandatory for all legal entities since 1 January 2017. It belongs to legal entities (specifically members of their bodies) to identify and register beneficial owners and eventually to state that the beneficial owner can not be determined or identified.
The legal entities and especially business corporations which are registered in the Commercial Register are obligated to enter the data about their beneficial owners into the register until 1 January 2019; other legal entities registered in another registers (e. g. trust fonds) must accomplish this obligation until 1 January 2021. During the said periods the data may be entered into the register without the obligation to pay the court fee for the registration.
The beneficial owner of legal entity is according to AML Act a natural person that legally or actually, directly or indirectly has an ability to perform significant influence over the legal entity. It is deemed that when meeting the requirements of the previous sentence the beneficial owner is a natural person, if it: (i) alone or together with other persons acting in concert holds more than 25 per cent of its voting rights or disposes of more than 25 per cent of the capital; (ii) alone or together with other persons acting in concert controls an entity referred to in the previous paragraph; (iii) is a recipient of at least 25 per cent of entity´s revenue. If any person does not meet the criteria of a beneficial owner or if it is impossible to determine the beneficial owner, the statutory body or the natural person in a similar position as a member of the statutory body shall be considered a beneficial owner. If more than one person does meet the criteria of beneficial owner than all these people will be registered.
In addition to personal identification data, the data about the share of voting right and the share of distributed resources will be entered into the register; if the position of the beneficial owner is established otherwise it would be other facts too.
The motion to enter into the register of beneficial owners is necessary to substantiate with documents about facts that are supposed to be entered into the register, especially (i) documents providing the identity of the beneficial owner who cannot be verified from local register of residents and (ii) documents providing the position of the beneficial owner. Considering various reasons which determine the position of the beneficial owner, these documents cannot be in advance specifically defined and it is necessary to always examine the specific case.
The relevant data kept either in internal registration or entered in non-public register have to at all times correspond with the reality. According to this fact it is necessary to enter the variation into the internal registrational of the company and to submit the motion to enter changes in non-public register of beneficial owners without undue delay after the emergence of a decisive situation.
The consequence of non-fulfilment to register the beneficial owners could mean for the company factual impossibility to use credit services, financial services and other institutions including f. e. banks, auditors leasing companies or insurance companies as well as complications in procurement procedures under the Public Procurement Act.
If you have any questions or if you would be interested in advice or assistance in subject of the above-mentioned legal obligations, we are fully available.
Mgr. Jakub Málek, attorney at law – firstname.lastname@example.org
Denisa Vejmělková, legal assistant – email@example.com
17. 12. 2018