New obligations: Notification to the Transparency Register
The deadlines for registration of all companies to avoid fines are fast approaching.
The transparency register, in which the beneficial owners (natural persons) of legal entities must be entered, has already been in existence since 01.10.2017. The background to this is and was a European directive on money laundering and combating terrorism which was implemented and led to the creation of the transparency register in accordance with the Money Laundering Act (GwG).
Why has this not affected most of you so far?
There was a so-called “notification fiction” until 31.07.2021. In as far as the beneficial owners were identifiable from the commercial register, e.g. via the list of shareholders, no separate entry in the transparency register was required with some exceptions.
Why does this affect you today?
This notification fiction ceased to exist on 01.08.2021.
The Transparency Register thus became a full register, which means that the beneficial owners (natural persons behind the company) have to be entered in the Transparency Register, even if they can be found in the Commercial Register.
What types of companies are included?
All legal entities subject to private law and registered partnerships with their registered office in Germany as well as, under certain conditions, associations with their registered office abroad and administrators of trusts. Incidentally, the registered association is also affected by this ruling.
Who must be registered?
The natural person who is the beneficial owner of the respective company. First of all, this is anyone who holds more than 25% of the shares in a company, controls more than 25% of the voting rights or exercises control in a comparable manner.
It follows that in the case of shareholdings of companies (e.g. parent/subsidiary companies), you must go back in the shareholder structures until you have identified a natural person as the beneficial owner.
If there is actually no beneficial owner, e.g. in the case of 5 shareholders with 20% each, all legal representatives or all managing shareholders must be entered as beneficial owners.
As you can see, it is often not that easy to identify the beneficial owner. We will be happy to support you in this process and to care of the verification and notification to the Transparency Register for you.
What follows if you are registered?
Even if you have registered or perhaps are already registered, you will in future also have to report any changes in your company to the Transparency Register.
When do you have to act?
You have transitional periods for registration; these are:
- For stock corporation, SE and partnership limited by shares, by 31.03.2022.
- For GmbH, cooperative and partnerships (e.g. KG, OHG), by 30.06.2022.
- For all others, e.g. registered associations, by 31.12.2022.
Take care of the registration as early as possible.The registration volume will increase considerably towards the end of the deadlines and it cannot be ruled out that there may then be problems with electronic reporting. Please also take into account that queries from the Federal Office may arise and must be answered. We therefore recommend that you take care of the registration as soon as possible, and we will be happy to support you in this.
Who has access to the register?
Unrestricted access is granted, among others, to supervisory and law enforcement authorities, the Federal Tax Office, as well as local tax authorities and courts.
Case-related access within the scope of customer due diligence includes credit institutions, insurance companies, lawyers and notaries.
What are the consequences if you do not submit a report to the Transparency Register?
You could face fines of up to 1 million euros. The list of fines is available at www.bva.bund.de.
Fines of more than Euro 200,- will be published on the homepage of the Federal Office of Administration for a period of 5 years (naming and shaming).
We control the future with you!
For this reason we will gladly take over the registration for the transparency register for you. If you have any questions about the transparency register and the costs, please contact Sabine Kunz who is our lawyer and specialist in commercial and company law.