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What is a Beneficial Owner & Other Information

What is a Beneficial Owner?

A Beneficial Owner is defined in Article 3(6), 4AMLD, as any natural person(s) who ultimately owns or controls a legal entity, either through direct or indirect ownership of a sufficient percentage of the shares or voting rights or ownership interest in the entity, including through bearer shareholdings, or through control via other means.

These include:

  • ownership (directly or indirectly) of more than 25% of the company/society’s shares,
  • controlling (directly or indirectly) more than 25% of the company/society’s voting rights,
  • control via other means which is explained in Recital 13 of 4AMLD as follows:

“Control through other means may, inter alia, include the criteria of control used for the purpose of preparing consolidated financial statements, such as

  • through a shareholders' agreement,
  • the exercise of dominant influence or
  • the power to appoint senior management”.

If a relevant entity is a subsidiary owned by another corporate entity, any natural person(s) who holds or controls a shareholding of 25% plus one share, or an ownership interest of more than 25% in the parent corporate entity, is a beneficial owner(s) of the subsidiary.

If a relevant entity is a subsidiary owned by multiple corporate entities, Article 3(6), 4AMLD, states that a shareholding of 25% plus one share or an ownership interest of more than 25% in a subsidiary held by multiple corporate entities which are under the control of the same natural person(s), shall be an indication of indirect beneficial ownership.

Ultimately, it is a natural person(s) who must be identified and entered on the RBO as the beneficial owner(s) of the relevant entity, irrespective of how many layers of ownership there are in the company/society’s structure. The name of another company/society cannot be entered on the RBO.

If, after having exhausted all possible means and provided there are no grounds for suspicion, no natural person is identified as a beneficial owner, or if there is any doubt that the person(s) identified are the beneficial owner(s), the natural person(s) who hold the position of senior managing official(s) shall be recorded on the RBO as the beneficial owner. (Regulation 5(4) SI 110/2019). Relevant entities shall keep records of the actions taken to identify their beneficial owners (Regulation 5(5), SI 110/2019)

If in doubt, a company/society should seek legal advice to assist it in establishing who its beneficial owners are.

Who must file data with the RBO?

All corporate and legal entities (other than companies listed on a regulated market*), including Trusts, Investment funds and Industrial and Provident Societies are required by 4AMLD to keep details of their Beneficial Ownerships on their own internal register.

Only COMPANIES AND INDUSTRIAL AND PROVIDENT SOCIETIES will be required to file data with the central register of beneficial ownership (RBO).

*A company listed on a regulated market that is subject to disclosure requirements consistent with Union law or subject to equivalent international standards which ensure adequate transparency of ownership information is not required to file beneficial ownership data with the RBO.

No, in setting out the different means by which a natural person can control a company/society, the EU Directive specifically includes anyone who owns or controls more than 25% of shares or voting rights.

In instances where companies/societies have a large number of shares, a shareholder can have 25% of the overall available shares plus one extra share. For example: Company X has 1,000,000 shares at €1 each. If any person holds 250,000 (25%) or less shares, then they do not qualify under this requirement. However, if the shareholder owns or controls 250,001 shares then they qualify as a beneficial owner and details of same must be registered on the RBO.

This applies to all issued shares. You are advised to consult with your own financial and/or legal advisor in relation to queries regarding shares.

Please note that the percentage test in relation to ownership of shares should not be the only method to determine who the ultimate beneficial owner is – control of voting rights, ownership interest and control via other means must also be considered.

If in doubt, a company/society should seek legal advice to assist it in establishing who its beneficial owners are.

It is not clear who the beneficial owner of my entity is

The Directive and Regulations 5(2) of SI 110/2019 states that “all reasonable steps” should be taken to establish who the natural person Beneficial Owner is.

The steps involved include

  • giving notice under Regulations 6 & 7 of SI 110/2019 to any natural person(s) the company/society or its presenter has reasonable cause to believe to be a beneficial owner. Once issued, the natural person(s) to whom this notice has been issued has one month to provide the necessary details; or
  • giving notice under Regulations 8 & 9 of SI 110/2019 to any person(s) the company/society or its presenter has reasonable cause to believe to have knowledge of the set out in Regulation 9. Once issued, the person(s) to whom this notice has been issued has one month to provide the necessary details.

Failure by the natural person to reply and cooperate with the company/society or to make a false statement is a criminal offence.

Where all possible means to identify the beneficial owners have been exhausted unsuccessfully, the Regulations provide that the Senior Managing Officials (e.g., the Director(s) or CEO) shall be deemed to be the beneficial owners. Relevant entities shall keep records of the actions taken to identify their beneficial owners (Reg 5(5), SI 110/2019).

Terminology explained

This is any company, or Industrial and Provident Society incorporated in Ireland. This includes Private Limited Companies, Public Limited Companies, Designated Activity Companies, Companies Limited by Guarantee, and Private Unlimited Companies.

Exemptions

Article 3(6)(a)(i) of 4AMLD states that a company listed on a regulated market that is subject to disclosure requirements consistent with Union law or subject to equivalent international standards which ensure adequate transparency of ownership information is not required to file beneficial ownership data with the RBO.

Any company trading on an EEA regulated market, such as the Irish Stock exchange is exempt from registering. Those companies are already subject to rules that require them to disclose their owners/controllers. However, if a company incorporated in Ireland is a subsidiary of a listed company, the subsidiary company is still required to file details of its beneficial owners with the central register.

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