In future, all legal entities under private law (GmbH, AG, SE, foundation) and registered partnerships (GmbH & Co. KG, OHG and PartG) must report their beneficial owners to thetransparency registerregister. The amendment to the law stipulates that from August 1, 2021, the previously applicable notification fictions pursuant to sec.§ Section 20 para. 2 GwGwill no longer apply. Up to now, limited liability companies and many partnerships in particular have benefited from the notification fiction. The amendment to the law provides for different transitional periods for the new notification obligations. In future, the Federal Office of Administration will impose more fines for breaches of the reporting obligations
Background
Since 2017, legal entities under private law, registered companies and certain asset-managing legal structures in particular have been obliged under the German Money Laundering Act (GwG) to report their beneficial owners to the transparency register.
In the case of companies,beneficial owners are natural persons who directly or indirectly (i) hold more than 25% of the capital shares, (ii) control more than 25% of the voting rights or (iii) exercise control over the company in a comparable manner.
If no person who directly or indirectly holds an interest in or exercises control over the company meets the above criteria, the legal representatives of the company are deemed to be the notional beneficial owners.
Does every registered company have to submit notifications?
Many companies currently still benefit from the so-called notification fictions. Beneficial owners do not have to be reported to the transparency register if their status as a beneficial owner is already apparent from the information in public registers (such as the commercial, partnership, cooperative or association register). However, the fictitious notification only applies if the information can be retrieved electronically. A further notification fiction applies to listed companies.
Until now, the general fiction of notification has been particularly helpful for limited liability companies: every GmbH is obliged to submit an amended list of shareholders to the commercial register for every change in the person of the shareholders. If the company complies with this obligation, the details of the beneficial owners can usually be seen from this list of shareholders. If there is no actual beneficial owner, the members of the management as legal representatives can also be found in the commercial register. Therefore, notification obligations for GmbHs have so far regularly only existed against the background of voting trust, pool and fiduciary agreements that convey control over the GmbH but are not evident from the commercial register.
Does current information in other registers fulfill the notification obligation?
The legislator has removed the notification fictions from the Money Laundering Act with effect from August 1, 2021. This will result in a considerable administrative burden for companies. In future, legal entities will have to notify the transparency register of every beneficial owner, regardless of whether actual or fictitious beneficial ownership exists. A transitional period until June 30, 2022 (in particular GmbH, e.G. and PartG) or December 31, 2022 (in particular OHG and KG) applies to companies that still effectively benefited from the previous notification fiction until July 31, 2021. For AGs, SEs and KGaAs, on the other hand, there is only a shortened transitional period until March 31, 2022. There are no transitional periods for newly founded companies from August 1, 2021; the notification obligation applies immediately.
Transition period until 2022 - is there already a need for action?
Irrespective of the above amendment to the Money Laundering Act, every company should check once again whether the data provided to the commercial register and the lists of shareholders submitted are up-to-date and can be accessed electronically. There are always problems here with companies that were founded before the creation of the electronic commercial register at the beginning of 2007 and whose register documents (in particular lists of shareholders) have not been transferred to the electronic register file in some cases.
In your own interest, you should ensure that the relevant register data is up to date. The Federal Office of Administration regularly checks individual companies on a random basis and imposes fines in the event of breaches of the reporting obligations. These checks will increase again at the latest when the implementation deadlines expire.
Do you have any questions in connection with the transparency register? Please contact us.