Of interest.

Register of beneficial owners in 2023

During the last year, there were again significant changes in the field of register of beneficial owners. The obligation to actively identify and register data on persons, who in fact own or control legal entities and other legal arrangements, is relatively new in the Czech legal system. Due to the absence of historically tested national regulation and often due to the incorrect or incomplete implementation of European Union law, its legal regime is not yet firmly anchored, which leads to frequent changes in the legal regulation. Unfortunately, the year 2022 was no exception in this regard and led to several changes in this area which must be taken into account at the beginning of this year. The most important of these changes will be presented in this article.

A major amendment to the register

Act No. 245/2022 Coll. [1] entered into force on 1 October 2022 (hereinafter the “Amendment”), which is a substantial amendment to Act No. 37/2021 Coll., on the Register of Beneficial Owners, as amended (hereinafter the “UBO Act”). The Amendment significantly changed the existing rules for registering the beneficial owner of legal entities due to the earlier use of an imprecise definition of the beneficial owner and the scope of private law entities that did not have to register the beneficial owner.

Changing the concept of beneficial owner

As part of the register, there is no longer a distinction between the terms “ultimate beneficiary” and “person with ultimate influence, but instead a single umbrella term “beneficial owner” is used. The register thus has a lower informative value, as it is no longer clear whether a particular person is in that position because of his or her benefit from the activities of the legal person or because of his or her influence on its functioning. Although the Ministry of Justice has ensured an automatic change of terminology in the existing entries in the register, we still recommend checking that this has actually occurred in the case of your company, as the presence of a technical error cannot be ruled out.

Extension of the scope of beneficial owners

At the same time, there was also an extension of the scope of persons who are considered to be the beneficial owners. The beneficial owners of the corporation are now also persons who exercise decisive influence in the corporation which has a share of more than 25 % in the given (examined) corporation. Thus, the person controlling the shareholder of the (analysed) corporation with a share bigger than 25 % will also be the beneficial owner. This case is a material expansion of the range of beneficial owners compared to the legal regulation prior to the Amendment, when the beneficial owner can now be a 40% shareholder of a corporation which owns a 26% share in the respective (analysed) corporation (according to the legal regulation before the Amendment, in this case, the shares would be multiplied among themselves and could not establish a position of a beneficial owner). In this regard, it is therefore necessary to ensure that these beneficial owners are newly registered.

For the sake of clarity, we point out that beneficial owners of the corporation will also be natural persons who have a bigger than 25% share in (i) the registered capital, (ii) voting rights, or (iii) profit, other own resources, or liquidation balance. Although it is typical that a person will simultaneously have both a share in the registered capital and a share in the profit and voting rights in the same amount, it is enough to meet one of these requirements for the person to be considered a beneficial owner (e.g., when he owns a 26% share on the registered capital, although it has no voting rights or profit share). Above that, it does not necessarily have to be the shareholders of the given corporation, when the beneficial owner can also be a silent partner or an executive body with the right to royalties. We therefore recommend checking that all these persons are already registered as beneficial owners.

In addition, the beneficial owner of a corporation is generally a person who exercises decisive influence in it by other means – for example, in the case of an agreement (even an informal one) on the management of the given corporation or due to ties to family members in the management of the corporation. The legislation also remembers situations where the standard beneficial owner cannot be determined, in which case it will be necessary to register a substitute beneficial owner, namely a person in the top management of the corporation. In this regard, we recommend to ensure that the beneficial owner is registered with your corporation, even if it is only a substitute beneficial owner.

Expansion of the scope of persons obliged to register their beneficial owner

The amendment also significantly narrows the circle of legal entities which do not have to register the beneficial owner because they do not have one. Due to the Amendment, several types of legal entities fell out of the list of exceptions from the obligation to register the beneficial owner, and therefore the beneficial owner will now be registered for them. It is mainly a community of unit owners, a trade union, a church, a political party, or a hunting association. Their beneficial owners will typically be members of the executive body. The legislator mitigates the new obligation to register the beneficial owner imposed on these persons by stipulating in the amended Section 38 of the UBO Act the automatic register of members of executive bodies in the register of beneficial owners, while recorded data of natural persons will be drawn from public registers and the register of persons. Nevertheless, we recommend checking that in the case of these legal entities the data has been automatically overwritten and that the respective beneficial owners are actually entered in the register.

Expansion of automatic entries and changes in the system

In connection with the Amendment, a new interface of the register system was implemented, which reflects the changes made by the Amendment. Therefore, updated forms are used for submitting enrolment proposals, and at the same time the system has new functions (e.g. generating a graphic representation of the structure of relationships according to the submitted enrolment proposal). In addition, the amendment brings an expansion of the range of automatic registers of the beneficial, not only for newly registered persons (e.g. associations of unit owners, political parties), but also for the structures of business corporations in which decisive influence is exercised based on control. Therefore, if there will be a corporate structure where the presumption of control based on a 40% or greater share is applied, there will be an automatic census, even in the case of multiple chained structures. To some extent, the above-mentioned changes in the circle of beneficial owners can be automatically transcribed without the need for the corporation’s interaction, but we recommend that you always check the accuracy of such automatic transcription.

Automatic changes and modification period

The changes made by the Amendment were reflected to a significant extent in the register without the need for the activity of registered persons due to the activity of the Ministry of Justice and automatic registers. However, you cannot completely rely on this, and you need to check whether the entry in the register is made in accordance with the Amendment.

Legal entities, which had a correctly registered beneficial owner according to the legislation before the Amendment, have until 1 April 2023 to make changes in their register so that it corresponds to the legal regime according to the Amendment. Legal entities that did not have to register the beneficial until now, but according to the Amendment must already register him (e.g. association of unit owners, political parties) have a deadline of 1 April 2023 to ensure that their beneficial owner is entered in the register.

If a legal entity does not have a registered beneficial owner yet, it is necessary to rectify this without delay. There is no exception for this case, and the legal entity in question, including its beneficial owners, will therefore be subject to the full extent of the sanctions foreseen by the legislation.

Future non-publicity of the register

The last significant change that the register is likely to face in the near future is its closure to the public. In its recent judgment,[2] the Court of Justice of the EU established the invalidity of the provisions of EU law regarding the possibility of general public access to the register with regard to the right to private life and the protection of personal data of the registered beneficial owners. EU Member States are thus obliged to make their registers of beneficials unavailable to the public and to allow access only to persons with a legal interest. While some states have already done so, the Czech Republic has not yet taken this step. However, it is likely to happen soon.


The recent amendment of the UBO Act resulted in particular in (i) modification of the definition of the beneficial owner, (ii) change in the circle of persons considered to be the beneficial owner, (iii) abandonment of the use of the concepts of ultimate beneficiary and person with ultimate influence, (iv) expansion of the scope of persons who must register the beneficial owner (e.g. about the association of unit owners), and to (v) changes in automatic entries and proceedings.

We therefore recommend, without undue delay, to carefully check that your legal entity has properly and correctly registered beneficial owners in accordance with the Amendment. The deadline for legal entities to reflect the changes introduced by the Amendment in their registers and to ensure their compliance with the Amendment expires on April 1, 2023. If they do not do so, they are exposed to the possibility of sanctions according to the UBO Act. Legal entities that do not yet have the beneficial owner registered at all are also subject to sanctions, and they can avoid these sanctions only by making an entry in the register without delay.

We are at your disposal in case of any questions concerning the issues of the Act on the Register of Beneficial Owners, its current Amendment, the correctness of the entries made in the register of beneficial owners or the area of beneficial owners’ register in general. Please do not hesitate to contact us.


[1]Act No. 245/2022 Coll., which amends Act No. 37/2021 Coll., on the Register of Beneficial Owners.

[2] Judgment of the Court of Justice of the EU of 22/11/2022 in the case of Luxembourg Business Registers, case C‑37/20 (Joined Cases C-37/20, C-601/20).


Mgr. Martin Heinzel, senior attorney – heinzel@plegal.cz

Mgr. Tomáš Jančar, junior attorney – jancar@plegal.cz





20. 01. 2023