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Have you already registered your beneficial owner?

Helena Šulcová
19/11/2018
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The Amendment to Act No. 304/213 Coll., on the Public Registers (hereinafter the "Act") brought the obligation to register the beneficial owner with effect from 1 January 2018. This obligation must be met by companies registered in the Commercial Register before 1 January 2019, other legal entities registered in other public registers and trust funds by 1 January 2021.


Who is the beneficial owner?

Beneficial owner is a natural person having actual or legal possibility to exercise directly or indirectly a dominant influence over a legal entity in the trust fund or other arrangement without legal status.


The beneficial owner is usually:

  • A person holding more than 25 % of the voting rights in the company
  • A person holding more than 25 % share in the registered capital of the company
  • A person controlling the company with the above-mentioned shares
  • A recipient of at least 25 % of the profit of a corporation
  • A member of the statutory body, if there is no beneficial owner or can not be determined otherwise


 Why to register a beneficial owner?

The law does not mention penalization in case of non-fulfillment
of the obligation to register the beneficial owner, in any case by not meeting these requirements you may:

  • Lose the opportunity to participate in public contracts
  • Make more difficult for you to access credit and other financial products.

For multinational and regulated companies the compliance should be an obviousness. 


How to register the beneficial owner?

It is necessary to apply for registration of the beneficial owner. The application form is published on the justice.cz website (https://issm.justice.cz/podani-navrhu/formular). The proposal must be submitted by an authorized person and accompanied by supporting documents stating the details of the beneficial owner. Until the end of 2018, the registration is free of charge, later for a fee of CZK 1,000 (for companies registered in the Commercial Register before January 1, 2018).


 Who can take a look into the register of the beneficial owner?

The register is not public (§118g of the Act), it cannot be viewed and searched for information. A registered person can obtain a listing of the beneficial owners' records.

However, the Ministry of Justice will allow remote access to the data of the beneficial owner to certain persons and authorities specified in the law in connection with the fulfillment of their legal obligations. In addition to the contracting authorities and the Office for the Protection of Competition, these include, in particular, the law enforcement authorities, the intelligence services, the tax administrator, the Czech National Bank, the Supreme Audit Office, the Financial Analytical Unit, the obligatory persons under the Act on Certain Measures against the Legalization of Proceeds from Criminal activities and financing of terrorism in connection with client identification and control, and some others.

In addition, data from actual owners' records may also be provided to others to a limited extent, if such a person demonstrates an interest in preventing a crime of a participation, a participation in negligence or money laundering (as also in negligence) and their source crimes as well and the crime of a terrorist attack.


 
What to do if you do not know the beneficial owner of your company?

Some companies may have a more complicated ownership structure and your parent company will not be able to provide you with information as to who is the beneficial owner of your company. In such case, we can assist you with identifying the ownership structures, the identification of the beneficial owner and, of course, with preparing and completing the necessary documentation.

Author

Helena Sulcova
Helena Šulcová
Audit Manager
Crowe