The adoption of the fourth Anti-Money Laundering (AML) directive brought with it a number of legal notices to be implemented separately. One of these key changes relates to the Companies Act (Register of Beneficial Owners) Regulations, published on 20 December 2017.
With these changes, all companies formed and registered in Malta are now required to both identify and internally register their ultimate beneficial owners (BO). Information is also to be handed over to the Malta Registry of Companies to keep its own beneficial owners register which will be made public.
The regulation came into force in January 2018 whilst allowing already existing companies a six-month period (expiring on 30 June 2018) within which they need to comply with the new requirements.
A company’s beneficial owner refers to the individual or individuals who own or control the company through direct or indirect ownership of 25% plus one or more of the Company shares or more than 25% of the voting rights. The term also refers to individuals having other ownership interests including exercising a dominant influence or having the power to appoint and/or remove the majority of the board of directors.
In line with legal notice 374 of 2017, the information provided to the Registrar on each beneficial owner needs to include the following particulars:
- the name, the date of birth, the nationality, the country of residence and an official identification document number indicating the type of document and the country of issue, of each beneficial owner;
- the nature and extent of the beneficial interest held by each beneficial owner and any changes thereto;
- the effective date on which a natural person became, or ceased to be, a beneficial owner of the company or has increased or reduced his beneficial interest in the company.
Failure to comply to the regulation shall incur imposed penalties (both lump sum and daily) determined by reference to the Second Schedule of the regulation as indicated below:
- Failure to keep record of beneficial owners
- Failure to provide information to the Registrar about a change in the beneficial ownership of a company
- Failure to comply with regulation within six months from the coming into force
- Failure to provide the Registrar with a declaration containing information on the beneficial owners of the company.
In addition, if the information provided to the Registrar is knowingly false, deceptive or misleading, any officer, shareholder or beneficial owner providing the said information shall be liable to a fine of up to €5,000 or imprisonment of up to six months or both.
Contact our team of experts at Firstbridge to learn more about your obligations under the new Company Act Regulations.