Declaration relating to beneficial ownership

Benjamin A. Kergueno, LL.M > Post on tax law > Declaration relating to beneficial ownership
financement

Within the context of anti-money laundering and combatting terrorism financing, numerous mechanisms have been implemented. An order dated 1st of December 2016 has reinforced these mechanisms. This order transposes article 30 of the Directive, dating from 20 May 2015 , which created a register for the beneficial owners of legal entities.

This order instituted articles L 561-46 and following of the Monetary and Financial Code relating to beneficial owners. This order was supplemented by a decree dated 12 June 2017 , which enabled a register for beneficial owners to be implemented, as defined in article L. 561-2-2 of the Monetary and Financial Code. The order dated 1st December 2016 is therefore followed by a decree and a ruling dated 1 August 2017 relating to regulated tariffs to be applied by commercial court registries.

The declaration relating to beneficial owner(s) must make it possible to identify any natural person holding, whether directly or indirectly, (via an intermediary) at least 25% of the share capital and/or voting rights.
If the beneficial owner is unknown (no shareholder holds, whether directly and/or indirectly, more than 25% of the share capital and/or voting rights), any person exercising a right of control over board of directors and/or management (e.g. manager, chairman) must be declared.

Note that this original declaration must be signed by a legal representative (physical person) of the company. The legal representative’s name must be inscribed alongside his/her signature, making the legal representative liable for the declared information.

The following companies must mandatorily file a declaration of beneficial ownership with the Registry of the Commercial Court having jurisdiction over them (where the company is registered) :

  • Commercial companies (e.g. SARL (Société à Responsibilité Limitée) [limited liability company], SA (Societé Anonyme) [public company], SAS (Societé Par Actions Simplifieé) [simplified limited liability company], SARLU (société à responsabilité limitée unipersonnelle) [single-member limited liability company], SASU (Société par Actions Simplifiée Unipersonnelle) [simplified limited company with a sole shareholder], EURL (Entreprise Unipersonelle à Responsibilité Limitée) [sole trader company] etc.) ;
  • Non-trading companies (SC (societe civile) [non-trading company], SCI (Société Civile Immobilère) [real estate holding company] etc.) ;
  • Economic Interest Groups (EIG)
  • Associations registered with the RCS (Trade and Companies Registry)
  • Undertakings for Collective Investment

The registry of the commercial court, receiving this declaration, must check the declaration in light of the information at its disposal.

The beneficial ownership document should include the following information:

Information allowing the company to be identified:

  • Company name
  • Legal form
  • Address of the registered office
  • Identification number (Siren) [a form of French business identifier]
  • RCS where the company is registered
  • Information allowing the beneficial owner to be identified:
  • Name
  • Preferred name
  • Pseudonym
  • First name(s)
  • Date and place of birth
  • Nationality
  • The personal address of the beneficial owner
  • The methods of control exercised over the company (ownership of share capital or voting rights, the exercise of a control right over the management or board of directors)

Note that in the event of there being several beneficial owners, it will be necessary to fill in an insert. (to be attached to the beneficial ownership declaration).

This declaration must show the date on which the person became a beneficial owner of the company

The filing of this declaration costs 24.80 euros for companies registered after 1 August 2017.

The filing price of this declaration for companies registered prior to 1 August 2017, costs 54.42 euros. Companies registered prior to 1st August 2017, must file this declaration before 1st April 2018.

Note that failure to file this declaration with the registry of the commercial court having jurisdiction, or in the event a declaration contains false information (whether filed voluntarily or involuntarily) is punishable by 6 months imprisonment and a fine of 7,500 euros .

An additional penalty may be applied to natural persons who may be prohibited from acting as a director.

All information contained in this declaration of beneficial ownership may be disclosed to a limited number of persons , the beneficial ownership registry is not a public record.

By way of an example from an earlier case:

If a SA has 3 shareholders, where 2 shareholders are natural persons (A & B) and one is a corporate shareholder (C).

  • Natural person shareholder A owns 50% of the SA
  • Natural person shareholder B owns 25% of the SA
  • Legal entity C owns 25% of the SA

Furthermore, company C is a single-person company, with one shareholder owning 100% (in this instance Mr. B)

  • We shall complete our Declaration relating to beneficial ownership as follows, for the first owner we will register A, provide information about this owner and provide that the owner directly holds 50% of the SA.
  • On an insert, we shall declare that Mr B directly owns 25%, to which we shall add that this 25% is held indirectly. Thus, in total we shall declare 50% for this shareholder and we shall explain why this owner holds 50%*.

*The shareholder owns 25% directly to which another 25% held indirectly is added, or 50% of direct and indirect holdings.

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