On the 5th October 2020, a guidance document on the Register of Beneficial Owners of Commercial Partnerships was issued by the Malta Business Registry, so as to provide general information and guidance to Maltese-registered companies vis-à-vis their beneficial ownership obligations in terms of the Companies Act (Register of Beneficial Owners) Regulations (the "BO Regulations").
This guidance document follows, inter alia, from the introduction of various changes to the BO Regulations brought about by virtue of Legal Notice 247 of 2020 on 16th June 2020. In terms of the said amendments, the type, extent and frequency of the information required to be reported to the Malta Business Registry vis-à-vis a company's ultimate beneficial ownership, has now increased – subjecting all Maltese companies to significantly heftier penalties in the event of default.
Here is a recap of the amendments introduced to the BO Regulations:
- A certified true copy of an official identification document for every beneficial owner must now be submitted to the MBR upon the first declaration of beneficial ownership and upon any changes to the beneficial ownership of the company (including changes to the identification details of the beneficial owner/s originally provided). Note that certification must be carried out by a warranted professional, and if the certifier is a non-EU resident, the certified document would additionally need to be apostilled.
- Every company shall, upon each anniversary of its registration, file a statutory return (entitled Form BO – Annual Confirmation) showing any change in details of its beneficial owner/s, or confirming that no change has taken place, within 42 days after the date to which it is made up. This is to be signed by at least 1 director or the company secretary. Note that this form does not replace the Form BO(2) (which is required to be filed upon a transfer, transmission or allotment of shares, or other changes in the share capital or voting rights of the company), but is additional to same.
- Where there is a change to the company's senior managing officials, the company shall file a statutory notice of such change (entitled Form BO – Change in SMO) within 14 days of the change. This is to be signed by at least 1 director or the company secretary.
- Where there is a change to any details of the beneficial owner/s of the company as previously reported, the company may, at any time, file a statutory return indicating such changes (entitled Form BO – Change in Details of BO/SMO). In line with point 1. above, any such declaration must be accompanied by a certified true copy of the official identification document of the beneficial owner/s. The new beneficial ownership forms can be accessed and downloaded from the Malta Business Registry's online portal via: https://mbr.mt/promo/official-registry-forms
- A liquidator of a company shall keep the register of beneficial owners of the company for a period of 10 years from the date of publication of the striking of the company's name off the register.
- The penalty originally imposed in instances whereby the Registrar – as part of the measures that he is empowered to take so as to ensure that the information provided thereto is adequate, accurate and current – deems it necessary to update the beneficial ownership information in the register in terms of the BO Regulations, has significantly increased, such that in any such instances, every officer of the company shall now be liable to a penalty of not more than €100,000.
- The administrative penalties set out in the Second Schedule to the BO Regulations have also been increased to a maximum one-time penalty of €10,000+ a maximum additional daily penalty of €500 until such time as the default is remedied.
- The powers of the Registrar have been extended, such that in addition to the power to refuse the registration of any company document if the beneficial ownership information has not been submitted or if the Registrar is not satisfied that the company has provided accurate and up to date information on the beneficial owner/s, the Registrar is now also expressly vested with the following authority:
i) To restrict new incorporations for directors sitting on the Board of other companies that have failed to submit the required beneficial ownership information;
ii) To take any steps necessary and/or require such information or documentation as deemed necessary to ascertain the correctness of the beneficial ownership information submitted to him, before proceeding to register a new company or return;
iii) To carry out physical on-site investigations at the registered office of the company (or at such other place as may be specified in the company's M&As where the beneficial ownership register of the company is held), in order to verify that the beneficial ownership information submitted is accurate and up to date;
iv) To inform the company in writing when he is not in receipt of the information on a company's beneficial owner/s, wherein if the company fails to provide the Registrar with the required beneficial ownership information within 1 month from the afore-mentioned written notice, the Registrar may proceed to publish a notice in the Gazette or on its website, and at the expiration of 3 months from the publication, may proceed to strike the name of the company off the register, unless cause is previously shown to the contrary or the Registrar is satisfied that there are sufficient grounds not to proceed with the striking off.
Note however that the Registrar's powers to strike the name of a company off the register in terms of paragraph 5(iv) here-above may be subject to an order by the court for the name of the company to be restored to the register where, upon an application made by the member or creditor or such other person before the expiration of 5 years from the above-stated publication of the notice of the striking off, the court is satisfied that it is proper to do so, and upon an official copy of the order being delivered by the Registrar of the Courts to the Registrar of Companies, the company shall be deemed to have continued in existence as if its name had not been struck off.
v) To strike off the name of a company if the beneficial owner becomes sanctioned by international organisations.
Note that the 3-month period allowed in terms of paragraph 5(iv) above, is not applicable in the case of sanctioned companies.
With respect to the provisions of the BO Regulations concerning the striking off of a company's name from the register, it is important to note that the rights and responsibilities, if any, of every director or other officer of the company and of every member of the company, shall continue and may be enforced as if the name of the company had not been struck off the register.
It is therefore essential that companies understand and appreciate the remit of their obligations emanating from the BO Regulations so as to ensure full compliance therewith.
The guidance document issued by the Malta Business Registry can be accessed and downloaded from the Malta Business Registry's online portal via: https://mbr.mt/wp-content/uploads/2020/10/Guidance-document-on-the-Register-of-Beneficial-Owners-of-Commercial-Partnerships.pdf
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.