REGISTRATION OF BENEFICIAL OWNERSHIP

Beneficial Ownership

A beneficial owner is a natural person who ultimately owns or controls a particular company. Every company will, as a matter of fact, have a beneficial owner.

Identifying Beneficial Owners

There are three methods for identifying the beneficial owners of a company.

Direct Beneficial Ownership

If a natural person holds at least 25 per cent plus one share of all issued shares, that person will be a beneficial owner of the company.

Consider the following scenarii:

Darragh Jáuregui-Hogan and Asenette Jáuregui-Hogan are the members of Jáuregui-Hogan Limited. Each hold 50 per cent of the issued shares carrying voting rights.

Alpha Company Limited by Guarantee is a registered charitable organisation which has adopted the Charities Regulatory Authority’s model constitution. It has five directors, one of whom is the chairperson, and has a chief executive officer. The directors meet six times in each year to transact business; with the chief executive officer having the delegated responsibility of carrying on the day-to-day business of the company.

Here, Darragh and Asenette have holdings exceeding 25 per cent plus one share. Therefore, both are the beneficial owners of Jáuregui-Hogan Limited.

In the case of Alpha Company Limited by Guarantee, each director has 20 per cent of the voting rights. However, the chairperson, being the senior-most director and having a casting vote, will be a beneficial owner. In addition, depending on the nature of the delegated responsibility, the chief executive officer might also be a beneficial owner.

Indirect Beneficial Ownership

If one company is owned by another company, beneficial ownership is determined by that other company.

Consider the following scenario:

Jáuregui-Hogan Secretariat Limited, Jáuregui-Hogan Trusts Limited and Jáuregui-Hogan Concordia Limited are members of the Jáuregui-Hogan Group of Companies. Each are wholly owned subsidiaries of Jáuregui-Hogan Limited; that is, Jáuregui-Hogan Limited owns 100 per cent of the issued shares of each subsidiary company. Darragh Jáuregui-Hogan and Asenette Jáuregui-Hogan each hold 50 per cent of the issued shares in Jáuregui-Hogan Limited carrying voting rights.

Here, an immediate owner of each subsidiary is identified. While the immediate owner of each subsidiary is Jáuregui-Hogan Limited, a beneficial owner must be a natural person. Therefore, Darragh and Asenette are the beneficial owners of each subsidiary.

Beneficial Ownership Through Control via Other Means

If all possible means for identifying both direct and indirect beneficial ownership is exhausted and no beneficial owner can identified, or where there is doubt as to the beneficial ownership, the natural persons holding office as senior management will be the beneficial owners. In this case, the senior management may be a director or a chief executive officer, and the company must document the actions exhausted and subsequently taken to identify the beneficial owners.

Registration

The company must record the identity of its beneficial owners in its statutory register of beneficial ownership, together with certain particulars. Those particulars are the date of birth, nationality and residential address of the beneficial owners; the nature and extent of the interest held, or of the control exercised, by the beneficial owners; and the date on which he or she became, and subsequently ceased to be, a beneficial owner. Failure to comply with this requirement is an offence; the maximum punishment for which is, on conviction on indictment, a €500,000.00 fine.

A natural person has a legal obligation to notify the company of his or her status as a beneficial owner. Failure to comply with this requirement is an offence; the maximum punishment for which is, on summary conviction, a €5,000.00 fine.

In addition, each company must deliver its beneficial ownership information for recording in the Central Register of Beneficial Ownership of Companies and Industrial and Provident Societies. Newly incorporated companies must deliver that information within five months of its date of incorporation. Further, every company must also deliver changes to its beneficial ownership information within 14 days of the date of those changes. Failure to comply with either of these requirements is an offence; the maximum punishment for which is, on conviction on indictment, a €500,000.00 fine.

As the information contained in the Central Register of Beneficial Ownership of Companies and Industrial and Provident Societies is sensitive in character, only a limited  number of senior officers of public authorities have unrestricted access to it. Otherwise, certain designated persons are entitled to access that information, though on a limited basis.