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News / Legal alert: Central Register of Beneficial Owners - new obligation for companies/partnerships

Legal alert: Central Register of Beneficial Owners - new obligation for companies/partnerships


03.09.2019

Legal alert: Central Register of Beneficial Owners - new obligation for companies/partnerships

Please be reminded about the obligations imposed on your companies by the Act on Counteracting Money Laundering and Financing Terrorism of 1 March 2018 (uniform text in the Journal of Laws of 2019, item 1115).

Beginning with 13 October 2019 the Minister of Finance will keep the Central Register of Beneficial Owners, i.e. an electronic record of natural persons exercising control over Polish commercial companies/partnerships, i.e. beneficial owners.

The following entities must report and update information about their beneficial owners:

  1. registered partnerships;
  2. limited partnerships;
  3. limited joint-stock partnerships;
  4. limited liability companies;
  5. joint-stock companies, save for public companies.

In principle (the definition indicated in article 2 section 2 point 1 of the said Act is very broad), a beneficial owner is a natural person that exercises direct or indirect control over the company/partnership by way of vested rights arising from legal and/or actual circumstances, which enable that person to exert decisive influence on the activities or actions carried out by the company/partnership, including  natural persons controlling (indirectly or directly) more than 25% of stocks/shares in the given company/partnership.

The Register will disclose overtly and free of charge much information about beneficial owners:

a)  first name and surname,

b)  citizenship,

c)  country of residence,

d)  PESEL number or date of birth - for individuals not having a PESEL number,

e)  size and nature of the interest held or entitlements vested in the beneficial owner.

Remarkably, in the case of international capital groups having dispersed ownership structure, or controlling entities having special legal structure, performance of this obligation may be impossible or hindered. In such case, beneficial owners will be deemed the natural persons holding senior management positions in the controlling entity’s structure within the given capital group.

Any personal data disclosed in the Register will be made available and processed without the knowledge of the persons disclosed therein. The Polish Legislator did not restrict access to the database of beneficial owners by the need to prove reasonable legal interest.

For companies existing before 13 October 2019 a deadline of six months is provided to report the requisite data, i.e. by 13 April 2020, while companies established after that date will have to provide the necessary information within 7 days of being entered in the business register of the Polish Court Register. The legislator also provided a 7-day deadline to update the data already reported, where the data must be changed.

The submission is made by way of electronic means of communication, based on a submission model form made available by the Minister of Finance, with a qualified electronic signature or a signature confirmed by the ePUAP confidential profile being affixed on it.

Failure to satisfy this reporting obligation may give rise to a cash fine for the company of up to PLN 1,000,000. Importantly, the person reporting (management board member/shareholder) information about the beneficial owner  will be liable for damage caused by the submission of untrue details to the Register and for the failure to report the details within the statutory deadline (or changes in details covered by the Register entry), unless the damage was caused by force majeure or solely due to a fault of the aggrieved party or a third party, for which the person reporting information about beneficial owners and updates thereof is not responsible.

Activation of the Register constitutes implementation of the 4th and 5th Directives of the European Parliament and of the Council on counteracting money laundering and terrorist financing (AML Directives) that are successively being implemented in all the EU member states.
In the near future, beneficial owners will be identifiable in practically any commercial company/partnership registered in the EU territory.

The above issue will be of special significance for entrepreneurs for whom anonymity constitutes a material business aspect of their operations. The deadlines imposed by the Act mean that there are only a few months left to analyse potential consequences connected with the Register launch and to prepare for appropriate submissions.

The Ożóg Tomczykowski Law Firm can help you identify persons fulfilling the definition of a beneficial owner, whose data will have to be notified to the Register. We will also design for you a recommendation of actions leading to mitigate business risks connected with publication of that data in the Register.

If you have any questions or doubts connected with the activation and functioning of the Central Register of Beneficial Owners, please contact our Law Firm’s team.

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