5 Things You Must Know About The New Beneficial Ownership Register

The beneficial ownership regulations came into being on the 15 November 2016 and require all “relevant entities” which are Irish incorporated companies and legal entities to maintain a register of beneficial ownership interests. The directive is required to be brought into practice by 26 June 2017.

The experts at Ormsby & Rhodes have put together these 5 useful information points to ensure compliance.

  1. The definition of Beneficial Ownership

So, what exactly is a beneficial ownership as defined in the Regulations?

A beneficial owner is any natural persons who ultimately owns or controls (directly or indirectly) a shareholding or voting rights of 25% or more in a “relevant entity”. A few exceptions apply:

  • If the relevant entity is listed on an EU regulated market that is subject to disclosure requirements consistent with EU law (including the Transparency (Directive 2004/109) Regulations 2007); or
  • Companies or bodies corporate that are subject to equivalent international standards which ensure adequate transparency of ownership information.
  1. How to set up a register and what information it should contain

All relevant entities must keep an accurate, adequate and up-to-date register containing relevant information on any person who is a beneficial owner as defined in the Regulations. The information that the register should contain is as follows:

  • Name, date of birth, residential address and nationality
  • Type and extent of interest held by the beneficial owner
  • The date on which the details were entered in the register as well as the date of cessation as a beneficial owner

Companies are required to keep the information on the Register up to date.

Where the company has reason to believe that a change has occurred it is required to give notice to the relevant natural person(s) recorded on the register as a beneficial owner obliging them to respond within a month with a confirmation of whether they are or are not beneficial owners.

It is very important to note that if they are beneficial owners, they must confirm that their details entered into the register are accurate, adequate and current. If there are future updates required on the register or a person ceases to be a beneficial owner, the entity must notify the persons and get a confirmation whether or not a change has occurred, as well as get advice on the date of change and on accuracy of the details.

  1. What happens in the case of non-identification of beneficial ownership?

If the beneficial owner(s) cannot be identified after having exhausted all possible means, or if there is any doubt that a person identified is in fact a beneficial owner, the relevant entity must instead list its own senior managing officers (i.e. its directors and/or CEO) as the beneficial owners on the register unless otherwise notified.

  1. What happens in the case of non-compliance or failure to keep and maintain a register?

If an entity does not keep and maintain a register up to date, take all reasonable steps to hold complete information on the beneficial owners and give the appropriate notices required, fines of up to €5,000 may be imposed.

These fines also apply to natural persons if they fail to inform the entity that they are a beneficial owner or where they fail to comply with a notice served on them by an entity seeking relevant information.

  1. Where to go from here?

There have been several discussions that Ireland is in the process of putting in place measures to require the information on Beneficial Ownership Registers to be centralised onto one register for access by government authorities.

In the meantime, entities must begin to prepare for this by compiling a register and set out the requirements for notices, where relevant, to be sent to identified/suspected beneficial owners and for responses to be made by beneficial owners within one month from the date of receiving the notice to provide the information to the entity to ensure compliance with the Regulations.

 

Ormsby and Rhodes are available to assist in advising on the impact of these Regulations for your entity and in assisting you with the compilation and maintenance of a beneficial ownership register to comply with these Regulations. For more information, please contact Noel Brady or Ciara O’Luanaigh at our offices on