If you have a company registered in the Commercial Register or are planning to establish a new company that is registered in the Commercial Register, you should pay close attention. In February of this year, Act No. 52/2018 Coll. was adopted, amending and supplementing Act No. 297/2008 Coll. on protection against legalization of proceeds from crime and on protection against the financing of terrorism and on amendments and supplements to certain acts, as amended (hereinafter referred to as the "Amendment"), which focuses on revealing practices that we also call "money laundering" and terrorist financing, but the Amendment in question also amended Act No. 530/2003 Coll. on the Commercial Register and on amendments and supplements to certain acts, which added a new obligation for all legal entities that are registered in the Commercial Register, consisting of the obligation to determine and register in the Commercial Register a person - the ultimate beneficial owner. However, this obligation will not apply to those entities that are either public administration entities or issuers of securities admitted to trading on a regulated market.
The recorded data, which will also be visible in the extract from the commercial register, will therefore include, in addition to data such as registered office, business name, statutory body, amount of registered capital, etc., the identification of the ultimate beneficial owner.
The ultimate beneficiary pursuant to Section 6a of Act No. 297/2008 Coll. on the protection against legalization of proceeds from crime and on protection against the financing of terrorism and on amendments and supplements to certain acts, as amended, is a natural person who:
- has a direct or indirect share, or their sum is at least 25 %, in the voting rights in a legal entity or in its registered capital, including bearer shares,
- has the right to appoint, otherwise establish or dismiss the statutory body, management body, supervisory body or control body in a legal person, or any member thereof,
- controls the legal entity in another way or
- has the right to an economic benefit of at least 25 % from the business of the legal entity or from its other activities.
If it is not possible to determine the ultimate beneficiary according to the above criteria, the ultimate beneficiary is considered to be a member of senior management, i.e. a statutory body, a member of a statutory body, a procurator or a senior employee in the direct management authority of the statutory body.
The ultimate beneficial owner is therefore the one who actually controls and owns the legal entity in question.
Registration of the ultimate beneficial owner in the commercial register
In view of the adoption of the Amendment, an amendment to Decree No. 25/2004 Coll., which establishes the templates of forms for submitting proposals for entry in the Commercial Register and the list of documents that must be attached to the proposal for entry (hereinafter referred to as the "Amendment to the Decree") is also in the interdepartmental comment procedure, through which the forms used to enter commercial companies into the Commercial Register or to enter changes in these commercial companies into the Commercial Register are to be amended and supplemented.
At the time of writing this article, the Amendment to the Decree, which is being prepared, changes these forms so that the forms for proposals for registering new companies in the Commercial Register (so-called initial registration) will be supplemented with another piece of recorded information, namely the ultimate beneficial owner.
A new separate change form will also be created to record beneficial owner data for companies already registered in the Commercial Register. This form will also be used to record any changes to beneficial owner data, or to delete an old beneficial owner and register a new beneficial owner.
Under the Amendment, no court fee will be paid for the registration of the ultimate beneficial owner itself, or for the registration of changes to the ultimate beneficial owner's data, unlike other registration procedures.
The person of the ultimate beneficial owner will be reported not only with his/her identification data, but also with the data on the basis of which this natural person has the status of ultimate beneficial owner, i.e. whether it is a natural person who actually controls or controls the legal person or a natural person for whose benefit the legal person carries out its activities and the data that establish his/her status as ultimate beneficial owner (see points (i) to (iv) above).
The information on the ultimate beneficial owner will not have to be supported by any documents that would indicate the information to be entered in the commercial register. In other words, when entering the ultimate beneficial owner in the commercial register, no verification document will be prepared (as in the case of entries in the register of a public sector partner) that would certify the basis on which a specific ultimate beneficial owner was determined.
It is explicitly stipulated that the registration of the ultimate beneficial owner in the commercial register does not replace the obligation to register the ultimate beneficial owner in the register of public sector partners.
Deadline for submitting a proposal for registration of the ultimate beneficial owner in the commercial register
If you are planning to establish a company after November 1, 2018, you must reflect these changes, and therefore the proposal for registering a new company in the commercial register (so-called initial registration) must also include information about the ultimate beneficiary, i.e. the person who will have the "final" financial benefit from the activities or existence of the company.
Existing companies, or companies that will be registered in the Commercial Register by 31.10.2018, will have to register the beneficial owner in the Commercial Register no later than 31.12.2019.
Sanctions
It should be noted that if it turns out that the data on the ultimate beneficial owner does not correspond to reality, the registry court is authorized to impose a fine of up to EUR 3,310 on the company or the person authorized to act on its behalf.
We will be happy to provide you with more information on this topic in our office.