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What is the Beneficial Owner Register?

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…Get on the Register

You may have heard whisperings of a new central register of beneficial ownership being set up in recent years, with official legislation having been confirmed last year and signed into law recently. Improved and modernised legislation on this topic has long been expected, but saw delays due to the new GDPR guidelines as well as the Anti Money Laundering Directive. It is already a legal requirement for companies in Ireland to have an internal register of beneficial owners but it will now be a requirement to have your information on this new central register. The deadline for this will be 22nd November 2019 and registration is now open as of 29th July 2019.

What does this new legislation mean for you and your business, and what do you need to be aware of?

What is a “Beneficial Owner”?

The term beneficial owner refers to the person who holds 25% or more of a company’s shares.

What information is required?

  • Full Name
  • Address
  • Date of Birth
  • Nationality
  • PPS Number
  • A statement of the extent of beneficial ownership (Number of shares held etc.)

A delay was incurred in signing off on the legislation due to the new GDPR guidelines as information will be available to the public. Under the new guidelines, only lower level information will be accessible such as name, extent of ownership, partial date of birth, and country of residence.

Part of the reason for both the implementation of this legislation and the significant delays incurred in signing it in, come from the abovementioned Anti Money Laundering Directive. This directive states that all EU Member States must implement a central register of beneficial ownership information. In the case of Ireland the CRO (Central Registration Office) will be the responsible body.

We recommend taking immediate steps to ensure that your company is compliant with this new legislation and as always we advocate ensuring all your information is correct and collected in advance of any requirements. This will ensure that you avoid incurring the fine of €5000. Filing must be done online via the website: https://rbo.gov.ie and can be done either by the Company in question or an agent working on their behalf.

Should you have any concerns or queries on any business or financial matters, please don’t hesitate to contact us here at EcovisDCA where we are always happy to be of service.

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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY

If you Own It Then You Need to Put Your Name On It (All The Beneficial Owners)

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As of the 15th of November 2016, all Irish business owners or part-owners are required to create and maintain a list of the beneficial owners of the aforementioned business. This new order is in accordance with Statutory Instrument 560 of 2016. The new rule applies to all Irish companies, partnerships and all business entities whether publically listed or not.

A beneficial owner is defined as being a person who currently holds more than 25% of a business either directly or indirectly. This is a legal term wherein specific property rights belong to a person even when legal title of the property belongs to another person. Therefore even if you are not publically an owner of the business, if you hold more than 25% you will be required to be listed on this new document, the register of beneficial owners for the company.

 

The register of beneficial owners for the company must include for all parties:

  • Full Name
  • Date of Birth
  • Nationality
  • Residential Address
  • Nature and extent of interest and involvement with the company
  • Date entered into or removed from the register.

 

This new requirement will naturally take some time to implement accordingly, and we would advise all companies to ensure that this register is kept fully up to date with leaving and entering dates etc. to ensure that no issues arise in the future as a result of incomplete information.

 

It is also advised that the company issue letters to all those viewed as beneficial owners to inform them of this new register and to request the required information. It is essential to have a record of all endeavours to identify all beneficial owners and should they still be impossible to identify, the names of the directors and CEO must be entered on the Register.

The CRO will create a central register by the middle of 2017 so it is essential that all beneficial owners are reported to them before this time.

It is heavily advised that this be put in place as soon as possible as failure to comply can result in a fine of up to €5,000 being applicable to your business.

 

Should you have any concerns, queries or require further information on these or any other business and financial matters please don’t hesitate to contact us we are always available to help.

 

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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY

DCA Q&A – SHOULD I MOVE FROM SOLE TRADER TO COMPANY?

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Q:I’ve been in business as a sole trader for five years now. As things have picked up in the past six months, a few people have advised me to look at establishing a limited company. The problem is, I don’t know what advantages or disadvantages there are to this set-up, or how to go about the process. Can you help me out?

 

A: The first and most obvious advantage is hinted at in the name. As a sole trader, you’re personally liable for any debts accrued by the business. However, if you are the owner of a limited company, your personal liability is limited to a set amount – so, even if things go wrong and you have to shut down the business, you won’t be hounded to pay debts that are beyond your means. Moreover, once your business’s earnings pass a certain threshold, it’s tax-efficient to keep the funds within your company, and possibly re-invest them. Indeed, there are a few schemes that actively incentivise research and development of new products or services. This is why the limited company form is favoured by businesses who have to buy large quantities of stock on credit, or research-intensive businesses.

 

The downside to setting up as a limited company is that you need to file more paperwork on a regular basis with the Companies Registration Office (CRO). If you’re used to simply sending in your tax returns and availing of user-friendly VAT payment services, then having to file annual accounts as well as forms when you change directors, premises or business names will come as a shock. The burden of red tape increases when you establish yourself as a limited company. While the costs of setting up with the CRO and filing paperwork aren’t prohibitive, they are higher. As a general rule, we advise traders to seriously consider the limited company form once they’re paying themselves a salary that they’re comfortable with. It then makes life easier from the point of view of hiring staff, securing credit, and tapping investment if you need to.

 

The CRO process is relatively straightforward – you submit the Form A1, along with your memorandum and articles of association. While some highly experienced entrepreneurs will know what form of limited company they want, and be able to draft articles of association in your sleep, those without an in-depth knowledge should really invest in professional advice at this stage. Aside from making sure that everything is legally watertight, you can also get a more tax-efficient structure in place for your business as you grow. If you like, just contact us to set up an initial, no-obligation meeting where we can run through your options in more detail.

 

Declan Dolan