What is a Beneficial Owner?

Who is a beneficial owner

Sinead Floody, 24th September 2019

This is a question we are asked very often now that the Register of Beneficial Owners (RBO) is live and accepting filings. To put simply, a beneficial owner is a natural person/individual/human being who controls the company either through the percentage of shares they own, through their voting rights or via other means such as being a senior managing official within the company.

A beneficial owner is defined as:

Any natural person 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.

*Direct and Indirect Control

Control of a company can be direct or indirect. An example of direct control over a company is where an individual holds more than 25% of the shares in that company. The way in which an individual could have indirect control is in the case of a subsidiary which is owned by another corporate entity. Any individuals who own more than 25% of the shares in the parent company are deemed to be the beneficial owners of the subsidiary.

Where there are no individuals holding more than 25% of the shares or voting rights:

In some cases, companies may not have any one individual who owns more than 25% of the shares or voting rights in the company. In this case, information on the senior managing officials should be filed with the RBO. The CEO, Managing Director or entire board of directors can be considered as the beneficial owners in such cases. In the case of companies that do no have share capital, such as Companies Limited by Guarantee (CLGs), the same solution is taken whereby senior managing officials are considered the beneficial owners.

Exemptions to filing the RBO

All companies (and industrial & provident societies) registered in Ireland are required to submit their RBO, with the exception of companies that are listed on a regulated market (that is subject to disclosure requirements consistent with EU law or subject to equivalent international standards which ensure adequate transparency of ownership information).

Interpretation as to what constitutes a beneficial owner

It is the responsibility of the company itself to interpret and identify who the beneficial owners are. Company Bureau can assist you with understanding the definitions of a beneficial owner but encourage legal advice in the case of complex ownership structures. Please contact us if you need assistance.

What information is held on the beneficial owner?

The RBO requires the following information to be submitted on all beneficial owners:

  1. Name
  2. Date of Birth
  3. Residential address
  4. Nationality
  5. PPS number or certified BEN2 form
  6. Whether the control is direct or indirect
  7. Percentage of shares owned (if applicable)
  8. Nature of the interest in the company (i.e. shares, senior managing official, etc)

There are two tiers to accessing the RBO. Tier 1 is unrestricted access which is provided to authorised officers of An Garda Siochana, the Financial Intelligence Unit, the Revenue Commissioners and the Criminal Assets Bureau, among others. Tier 2 access provides restricted access to the public which will only disclose the beneficial owner’s name, month and year of birth, nationality and country of residence. The public can access this information for a fee.

Exemptions to access

Details of beneficial owners under the age of 18 will not be disclosed unless it is deemed in the public interest to disclose this information. There are currently no other exemptions available.

The Deadline

For companies incorporated prior to 22nd June 2019, the deadline for submitting their beneficial owners’ details is 22nd November 2019. All companies incorporated after 22nd June 2019 have 5 months to submit their beneficial owners’ information to the RBO.

Updating the RBO with Changes

The RBO need only be updated where there is a change in beneficial owners (e.g. a new beneficial owner due to a share transfer or change of senior managers) or where beneficial owners’ particulars have changed. In these cases, the RBO filing must be made within 14 days of the change taking place.

Company Bureau can assist you with your company’s first and subsequent RBO filings. To proceed with our RBO filing service or request more information please don’t hesitate to contact our Company Secretarial team on +353 1 6461625 or cosec@companybureau.ie.

Contact us now for further details

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