Since September 27 2020, companies and other entities are obliged to register information about their ultimate beneficial owner (s) with the Trade Register (the UBO register). In our previous news item (see Part I UBO register here) we took a closer look at the UBO register. In this newsletter we pick up where we left off.
Summary Part I
The ultimate beneficiary (the UBO) is the natural person who i) (co-) owns, ii) voting rights in iii) has a beneficial interest in, or iv) controls a company or other entity. The criteria used to determine whether someone is a UBO differ per legal entity. We also pointed out that the following persons can also be classified as UBO:
- someone who lives abroad;
- a natural person who has an interest in a Dutch entity, whether or not through a foreign entity;
- a natural person who can be regarded as a ‘pseudo-UBO’.
Ultimately, the entity is responsible for registering and keeping its UBOs in the Trade Register.
4. Who can view the UBO register?
The UBO register has a public and a non-public part. This distinction has been made for the privacy of the UBO.
The public section pertains to the following (public) data: name, month and year of birth, state of residence, nationality and nature and size of the interest of the UBO. This public data can be requested by anyone. Persons who wish to view the register only need to register and request the UBO data for EUR 2.50.
The non-public data are all other data specified in the UBO register, such as place of birth, date of birth, residential address, BSN and TIN, copy of the identity document and documents showing the importance and scope thereof. These data can only be accessed and viewed by competent authorities, such as the Financial Intelligence Unit, the DNB, the Public Prosecution Service, the Tax Authorities, the National Police, but also the civil-law notary.
5. Protection of public data and exceptions to the registration obligation
Naturally, non-public data is protected from the general public. The public data of the UBO can be protected under specific circumstances. The UBO must submit a request for this to the Chamber of Commerce. The request will only be honored if the UBO:
- is a minor;
- is under guardianship or administration; or
- needs police protection.
A request on the latter ground will only be granted in (very) exceptional cases. To this end, making the data publicly available exposes the UBO to a disproportionate risk, such as fraud, kidnapping, blackmail, extortion, bullying, violence or intimidation. If the request for blocking is granted, the Trade Register will only state the nature and scope of the interest of this UBO.
Exceptions to the registration requirement
The natural person who cannot be qualified as a UBO (for example when an interest in the relevant entity is too small) is exempted from the registration requirement. In addition, the following entities are excluded from the registration requirement:
- sole proprietorships
- listed BVs and NVs
- 100% subsidiaries of listed companies
- HOA’s
- associations with limited legal capacity that do not run a business
- legal entities in formation
- public legal persons
- other private legal entities, including historical legal entities (such as guilds and courtyards)
- foreign legal entities, such as a GmbH, which only have branches in the Netherlands. These foreign legal entities are probably subject to registration in the relevant Member State.
6. Obligation to report back for certain institutions and advisers
The information included in the UBO register must be adequate, accurate and up-to-date. This obviously requires an effort from the UBO and the entity. In addition, other parties, such as lawyers, civil-law notaries and banks (only ‘Wwft institutions’) and – under certain circumstances – competent authorities, are obliged to disclose any discrepancies between the information about the UBO in the Trade Register and the information they have at their disposal. report to the Chamber of Commerce. This reporting obligation of Wwft institutions follows from the obligation to perform a customer due diligence. If these parties do not comply with this, the supervisory authority can give these parties an instruction to do so reinforced with an order subject to a penalty and / or impose an administrative fine. Moreover, it is an economic crime.
The parties subject to a feedback obligation must identify the UBOs of their clients and take reasonable measures to verify the identity of the UBOs. They may not rely solely on information from the UBO register. In order to comply with this obligation, lawyers and civil-law notaries are not bound by their duty of confidentiality.
7. Consequences for practice
The entity must register the data of the UBO in the Trade Register. After the UBO registration has been completed, the Chamber of Commerce sends a confirmation of its decision to register to the entity and the registered UBO (s). After an adequate, accurate and up-to-date registration, the UBO registration only needs to be kept ‘up to date’. For example, the following changes must be communicated:
- changes of address of the UBO;
- changes in the type or size of the interest (for example, through an acquisition);
- a UBO dies.
The entity must report the changes to the Chamber of Commerce.
NB: in accordance with the General Administrative Law Act, objections and appeals are open against the decisions taken by the Chamber of Commerce to register and change the UBO information, as well as whether or not to refuse the request to block the UBO data.
If an entity does not comply with the registration obligation, this can lead to administrative enforcement (such as the imposition of administrative fines and / or periodic penalty payments) and even criminal enforcement. After all, it is an economic crime.
8. In conclusion
Entities that have not yet mapped out their UBOs and UBO data to be registered would do well to do so in the short term. Existing entities have until March 27, 2022, but entities established after September 27, are obliged to state this when they first register in the Trade Register.
The (timely) registration of the UBO (s) and the notification of changes in the UBO register takes some time, but will save a lot of trouble.
For more information or questions about the above, please contact mr. Sjef Bartels, mr. Carry Dullaart, mr. Mayk Koria, mr. Jordi de Pijper, mr. Jelmer Feenstra, mr. Jaap van der Steenhoven or mr. Laura Pordon of the Corporate Law section at Labré.
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