Voda-Forde Limited (Cork)
|Posted on 24 September, 2019 at 14:20|
With effect from 29 July 2019 the Registrar of Beneficial Ownership of Companies and Industrial & Provident Societies was appointed. The purpose of the Central Register of Beneficial Ownership, known also as RBO, is to improve corporate trust and transparency in Ireland and the EU by making it clear to law enforcement agencies, regulators, obliged entities, other businesses and the public about who ultimately owns and controls Irish companies and industrial and provident societies. The aim of the Directives is to deter money laundering and terrorist financing and to help sanction those who hide their ownership or control of Irish companies/societies for the purpose of facilitating illegal activities.
The central Register of Beneficial Ownership of Companies is a standalone Register established under anti-money laundering legislation and not company law. It is the duty of each company or society to identify their Beneficial Owners, keep their details on their own internal register and record these details with the RBO. This obligation is in addition to meeting their existing statutory filing obligations with the CRO under the Companies Acts in relation to directors, shareholders, etc. or in relation to other non-company legislation e.g. Industrial and Provident Societies.
The filing of beneficial ownership data must be done through the on-line portal on the RBO website www.rbo.gov.ie and is therefore a process separate to the registration of information/forms under the Companies Acts etc. Failure to comply with these requirements is a breach of statutory duties and a criminal offence with is subject to sanctions. A company/society is legally obliged under 4AMLD (Anti-Money Laundering Directives), 5AMLD and Section 5(2) of SI 110/2019 to maintain “adequate, accurate and current information in respect of its beneficial owners”.
Regulation 5(6) of SI 110/2019 states that the company/society’s internal register of beneficial owners must be available for inspection by any member of the Garda Síochána, the Revenue Commissioners, a competent authority, the Criminal Assets Bureau, or an (ODCE – Office of the Director of Corporate Enforcement) inspector appointed under section 764(1) of the Companies Act 2014.
What is a beneficial owner? A Beneficial Owner is defined in Article 3(6), 4AMLD, as any natural person(s) who ultimately owns or controls a legal entity, either through direct or indirect ownership interest in the entity, including through bearer shareholdings, or through control via other means. These will include:
- Ownership (directly or indirectly) of more than 25% of the company/society’s shares;
- Controlling (either directly or indirectly) more than 25% of the company/society’s voting rights;
- Control via other means as explained in Recital 13 of 4 AMLD as follows:
“Control through other means may, inter alia, include the criteria of control used for the purpose of preparing consolidated financial statements such as:
- Through a shareholders’ agreement,
- The exercise of dominant influence or
- The power to appoint senior management.”
If a relevant entity is a subsidiary owned by another corporate entity, any natural person(s) who holds or controls a shareholding of 25% plus one share, or an ownership interest of more than 25% in the parent corporate entity, is a beneficial owner of the subsidiary.
Article 3(6), 4AMLD refers to the circumstances where a relevant entity is a subsidiary owned by multiple corporate entities, and states that a shareholding of 25% plus one share or an ownership interest of more than 25% in a subsidiary held by multiple corporate entities which are under the control of the same natural person, shall be an indication of indirect beneficial ownership.
Ultimately, it is a natural person who must be identified and entered on the RBO as the Beneficial Owner of the relevant entity, irrespective of how many layer of ownership there are in the business’s structure.
What if after having exhausted all possible means and provided there are no grounds for suspicion, no natural person is identified as a beneficial owner, of if there is any doubt that the person identified are the beneficial owners? Then the natural person who holds the position of senior managing official shall be recorded on the RBO as the beneficial owner according to the provision contained in Regulation 5(4) SI 110/2019. It is important that the relevant entities keep comprehensive records of the actions taken to identify their beneficial owners. If in doubt, a company/society should seek legal advice to assist it in establishing who its beneficial owners are.
What are the timeframes for registering with RBO? The Register was opened and started accepting beneficial ownership filing on the 29th of July 2019. Any company/society who has not filed on or before the 22nd November 2019 will be deemed to be late and may be subject to sanctions as prescribed in the Regulations. Newly incorporated companies and I&ps must register their beneficial ownership details within five months of incorporation according to Regulation 20(2). Where the beneficial owner is a minor Regulation 25(5) of SI 110/2019 allows for the beneficial ownership details to be exempt from access by designated persons and the general public. The beneficial ownership details of minors will be automatically withheld from public access until they reach the age of 18. If you require assistance with RBO please contact us and request a quote.