Registration in the Register of Beneficial Owners in the Czech Republic
As previously reported on our website on January 1, 2018, the Register of Beneficial Ownership Information (hereinafter referred to as the “Register of Beneficial Owners”) was established in the Czech Republic. This article contains a brief overview of how to register a beneficial owner of a legal entity registered in a public register, or trust fund, into the Register of Beneficial Owners in order to fulfil the new obligations under the Public Registers Act.[1]
How to register
The obligation to file an application to the Register of Beneficial Owners is imposed on the respective trust fund or legal entity. Therefore in practise the application for registration is usually submitted by the statutory body of the respective legal entity registered in the Commercial Register – the executive directors in case of private limited companies (s.r.o.), the members of the board of directors in case of joint stock companies (a.s.), the partners in case of limited or general partnerships (k.s. or v.o.s). The application shall be filed without undue delay as of occurrence of the relevant circumstance. For the purposes of registration via registry courts, the respective application form is available on the website of the Ministry of Justice, which can be filled in only electronically. Once the application form is completed, it may be filed with the respective court in either electronic or paper form.
The registration of the beneficial owner is carried out by the respective registry court, which is the regional court (or the Municipal Court in Prague), within the district of which the registered office of the legal entity or the registered office, or address of habitual residence of the trustee, is located. The content of the application for registration shall be assessed only from the formal point of view, i.e. the data to be registered are not verified and their sources are not evaluated. The registry court shall enter the data into the Register of Beneficial Owners without issuing a decision within five working days as of the day on which the application for registration of the beneficial owner has been filed. Nevertheless, the registration of the beneficial owner may be carried out also by a notary via so-called direct registration. The direct registration shall be completed without undue delay as of the day of filing the application for registration. The registration is subject to a court fee amounting to CZK 1,000, but entities registered in the public registers before January 1, 2018 are exempt from this charge until December 31, 2018.
Registered data
The following data shall be registered in the Register of Beneficial Owners: name, address of habitual or permanent residence, date of birth and birth number (if assigned), nationality as well as data on share on voting rights within the entity, share on the entity’s profit, or another respective circumstance which constitutes the status of the natural person as the beneficial owner. The law does not specify any exhaustive list of documents necessary in order to prove the data registered about the beneficial owner true, it sets only a general obligation to support registered data with relevant documents. According to the explanatory report of the AML Act, such data can be supported, for example, by an affidavit.
Possible sanctions
The Register of Beneficial Owners is not publicly accessible yet[2] and is not a public register within the meaning of the Public Registers Act. As a result of that, there are no direct sanctions (fine or liquidation of the company) for non-compliance with the registration obligation. However, it is important to emphasize that non-compliance with the registration obligation may have negative consequences in the context of other legislation, such as the AML Act[3] (the liable entity may consider transactions of the non-compliant entity to be suspicious and it may possibly refuse to carry out such transaction), the Public Procurement Act[4] (the non-compliant entity as contractor may be excluded from a tender procedure), or the Insolvency Act[5].
[1] Act No. 304/2013 Coll., on public registers of legal entities and natural persons
[2] Directive (EU) 2018/843 of the European Parliament and of the Council of 30 May 2018 amending Directive (EU) 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, and amending Directives 2009/138/EC and 2013/36/EU (so-called fifth AML Directive) was adopted and after its implementation by the Member States inter alia any member of the general public should be permitted to access certain scope of information in the Register of Beneficial Owners
[3] Act No. 253/2008 Coll., on certain measures against money laundering and financing of terrorism, as amended
[4] Act No. 134/2016 Coll., on public procurement, as amended
[5] Act No. 182/2006 Coll., on bankruptcy and means of its resolution, as amended