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Description

Definition of Beneficial Owner

The Companies Act defines a beneficial owner as “the natural person who ultimately owns or controls a legal person or arrangements or a natural person on whose behalf transactions are conducted, and include persons who exercise ultimate effective control over a legal person or arrangement.”

Under the Regulations, a beneficial owner is a natural person who directly or indirectly:

• holds at least ten percent (10%) of the issued shares of the company;
• exercises at least ten percent (10%) of the voting rights in the company;
• holds the right to appoint or remove a director of a company; or
• exercises significant influence or control over a company.

Significant influence or control under the regulations means participation in the finances or financial policies of the company.

Salient Features of the Regulations

Particulars of Information of Beneficial Owner

A company is required to enter the following particulars of the beneficial owner in the register – the full name; the birth certificate number; the national identity number and the passport number; the nationality; the date of birth; the postal address; the business address; the residential address; telephone number; the email address; the occupation or profession; the nature of ownership or control; the date the person became the beneficial owner; the date the person ceases to be a beneficial owner and any other information that may be required by the registrar from time to time.

Obligations of the Company

Duty to Investigate the Beneficial Owner

The Regulations provide that a company has a duty to investigate and obtain the particulars of a beneficial owner. The first step in the investigation is issuance of a notice to the person they believe to be the beneficial owner of the company. A person issued with this notice by the company is required to comply with the notice within twenty-one (21) days from the date that the notice was issued. In case a person fails to comply with the notice within time, the company shall issue them with a warning notice of fourteen (14) days.

Restriction of Persons Who Fail To Comply With the Warning Notice

If a person fails to comply with the warning notice within fourteen (14) days from the date of issuance, the company shall restrict the relevant interest of the person. Thereafter, the company files with the registrar a copy of the restriction issued fourteen (14) days after issuance of the restriction.