Beneficial Ownership Register - reminder!


The European Union (Anti-Money Laundering: Beneficial Ownership of Corporate Entities) Regulations 2016 (SI 560/2016) came into effect in November 2016. The purpose is to give effect to the first paragraph of Article 30 of the MLD4 which requires legal entities incorporated in Ireland to obtain and hold adequate, accurate and current information in respect of their ‘beneficial owners’.

Ireland has adopted a two-step process to implementing the directive. The 2016 Regulations make provision for the first step which requires entities to hold a Beneficial Ownership Register (which we have written about previously). The second step in Ireland refers to the establishment of a Central Register and the imposition of a requirement on relevant entities to make returns to a registrar (CRO) - this has not yet been implemented.

The primary obligations of the Regulations rests with the relevant entities.

Beneficial Owner:

1. Under MLD4,

  1. Only a natural person can be a beneficial owner.
  2. A natural person who is s trustee could be a beneficial owner.
  3. Senior managing officials who have no shareholding in an entity may be its beneficial owners.

2. Beneficial owner must ultimately own or control the entity.

3. Shareholding or ownership interest of 25% + 1 in an entity by a natural person is an indication of direct ownership of that entity by that natural person (indirect ownership via corporate ownership – by natural person).

4. In certain circumstances where no natural person meets the test, then the entity’s senior managing officials may be taken to be its beneficial owners.

Other Points to Note:

  1. Regulation 14(1) imposes an obligation on relevant entities to keep and maintain a beneficial ownership register.
  2. The information required to go into the register is set out in Regulation 4 (1), (3) and (4).
  3. The failure to comply with Regulation 14 (1) is a summary offence and renders a relevant entity liable on summary conviction to a Class A fine.
  4. Regulation 4(2) sets out the primary obligations on relevant entities – which is to take all reasonable steps to obtain and hold adequate, accurate and current information in respect of its beneficial   owners.
  5. Regulation 5 imposes an obligation on relevant entities to give a Regulation 6 notice to any person whom it has reasonable cause to believe to be a beneficial owner. Failure to send a Regulation 6 notice is an offence unless exempted (Regulation 6 (5)). Exempted in the case where the beneficial owner volunteers the information. Regulation 8 notices also apply.
  6. Regulation 10 notices apply to cessations or changes in beneficial ownership.
  7. Regulation 14(3) provides for a statutory right of recourse to the High Court to have a beneficial ownership register rectified (however steps may be taken without going to court).
  8. The Regulations require the relevant entity’s officers and employees to consider who beneficially owns the company. Decisions should be formally authorised by the board.
  9. Please note that there are no aggregation provisions in the MLD regulations (e.g family members).
  10. These provisions also affect Companies Limited by Guarantee.  

Contact Ray Masterson to find out more about the Register of Beneficial Owners or about our tax and accounting services.

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