Claire Lord considers the arrival of the central register of beneficial owners.
Under Irish legislation, corporate and other legal entities incorporated in Ireland are required to obtain and hold adequate, accurate and current information in respect of their beneficial owners and put in place their own beneficial ownership register.
A beneficial owner is a natural person who ultimately owns or controls the share capital or the voting rights, or has control by any other means. The relevant legislation states that a holding (direct or indirect) of 25% plus one share will be indicative of ownership and control.
This information required to be contained in a company’s beneficial ownership register includes name, date of birth, nationality and residential address.
New requirements
New legislation introduced in March 2019 now requires that, in addition, relevant entities must obtain their beneficial owners’ PPS numbers, where the beneficial owner has been issued with one.
This new legislation also requires that from 22 June 2019, Ireland will have a centralised register of beneficial owners. Companies and industrial and provident societies incorporated in Ireland will have five months from that date to submit the information they hold on their beneficial owners to this central register. Such legal entities incorporated after that date will have five months from their incorporation to submit the required information.
The current requirement for submission of information to this central register relates to companies and industrial and provident societies only. Therefore, it is not yet clear how and when entities that are not companies or industrial or provident societies (for example, ICAVs) will be required to submit information on their beneficial owners to a central register.
Access to information
While companies and societies will be required to submit all of the details they hold on their beneficial owners to the central register, the only information that will be available to the public will be a beneficial owner’s name, country of residence, nationality, month and year of birth and nature and extent of ownership and control.
Individuals acting on behalf of An Garda Síochána, the Financial Intelligence Unit (FIU), the Criminal Assets Bureau, the Revenue Commissioners and other competent authorities will be entitled to all the information submitted to the central register, save for PPS numbers.
Any such authority (save for the FIU) may disclose the information they receive from the central register to a corresponding authority in any member state of the EU.
Remedies and sanctions
If any details are entered incorrectly in, or omitted from, a beneficial ownership register, or unnecessary delay takes place in updating a register to reflect that a person has ceased to be a beneficial owner, that person – or any other member or beneficial owner of that entity – can apply to the High Court for the register to be amended. The High Court may refuse the application, order for the register to be amended or require the entity to compensate the aggrieved person for any loss sustained.
An entity that breaches the new legislation may be liable to a fine of up to €5,000 or, on indictment, a fine not exceeding €500,000. In addition to these fines, custodial sentences of up to 12 months can be imposed on any person who knowingly or recklessly makes a statement to the registrar of the central register which is false.
Where an offence is found to have been committed by an entity under the new legislation, and is proved to have been committed with the consent or connivance of any of its directors, those directors will also be guilty of an offence.
Conclusion
Relevant entities should prepare for the establishment of the central register by ensuring that their internal beneficial ownership registers are up-to-date, include PPS numbers where they have been issued, and that their beneficial owners are aware that their details will soon become centralised and open to public inspection.
Directors of Irish companies also need to take responsibility for ensuring that their companies are complying with the new legislation, given the potential risk of not doing so.
Claire Lord is a Corporate Partner and Head of Governance and Compliance at Mason Hayes & Curran.
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