In less than 2 months, on 1 June 2021, new Act No. 91/2021 Coll. regulating the Register of Beneficial Owners (the “RBO Act”) will enter into effect, as a result of national transposition of the relevant EU directives regulating the prevention of money laundering or terrorist financing.
In terms of the EU law, the current Register of Beneficial Owners which is maintained pursuant to Act No. 304/2013 Coll., regulating the public registers of legal entities and natural persons, as amended (the “PR Act”) is insufficient since it is not public and the access is restricted to governmental bodies and other persons as defined by the law, for clearly determined purposes only. On top of that, a failure to comply with the registration duty is not subject to any penalties under the PR Act. Also, the legal entity and the trustee are the only ones who can have the beneficial owner registered in the Register. The court cannot, on its own motion, interfere with the contents of the Register maintained under the PR Act either.
Below, we have outlined the essential changes brought by the RBO Act for most business corporations and trusts and their beneficial owners.
Legal entities and other legal persons have a duty to record their beneficial owners into the Register of Beneficial Owners, which is a new information system of the public administration administered by the Ministry of Justice. An application for registration can be filed by the so called registrant; in case of a business corporation, the business corporation is the registrant and in case of a trust, it is the trustee. The registrant must ensure that valid information on the beneficial owner of the registrant or the trust conforms to the actual situation. The registrant must file the application for registration without undue delay after the operative event occurs (it does not apply where data on the beneficial owner have been transcribed automatically, see below).
The registrant has yet another duty – to obtain and record complete, accurate and up-to-date data about the beneficial owner of the registrant or the trust and to keep such data for 10 more years from the date the respective beneficial loses the status of a beneficial owner.
Definition of a beneficial owner
The RBO Act determines a wide range of natural persons who are treated as beneficial owners. It may not always be clear who the beneficial owner is and complex mathematical calculations of direct and indirect shares in voting rights or distributed profits might be necessary to determine the beneficial owner.
Automatic transcription of data from public registers, meaning that not every business corporation must file the application for registration
The RBO Act also aims at reducing the significant administrative burden imposed by the current legislation regarding beneficial owners on the (not only business) public and on the registry courts. The RBO Act establishes the so called automatic transcription of data from public registers which makes it unnecessary to register a legal entity’s beneficial owner who can already be ascertained from public registers (i.e. a shareholder in a limited liability company holding more than 25% share, a sole shareholder etc.).
If you need help registering the beneficial owner of your company or trust into the Register of Beneficial Owners in order to comply with the duties laid down by the RBO Act, please do not hesitate to contact us. If the beneficial owner of your company or trust is not easy to ascertain, we will be happy to assist you with this as well.
Mgr. Alexandra Kábrtová, Junior Attorney
JUDr. Vladimíra Pajerová, Attorney-at-law
AK Pajerová s.r.o.
6 April 2021