In 2017, the legislator introduced the UBO Register: a central register containing data regarding the natural persons underlying Belgian companies and other legal entities. But what if, as can be the case for companies controlled by public authorities, a company cannot designate a natural person who has control or holds a sufficient percentage of voting rights or ownership? These companies also fall within the scope of the UBO obligations.
The UBO Register
The Act of 18 September 2017 on the prevention of money laundering and terrorist financing and on restriction of the use of cash introduced the UBO Register in Belgium: a central register containing data regarding the natural persons behind Belgian companies and other legal entities(see Eubelius Spotlights June 2017, Eubelius Spotlights March 2018 and Eubelius Spotlights September 2018). It requires companies, non-profit associations, foundations and trusts to obtain and hold adequate, accurate and current information on their beneficial owners.
For companies, "ultimate beneficial owners" are, in principle, always natural persons – which creates the impression that, in principle, companies controlled by public authorities, which do not have a natural person as an ultimate beneficial "shareholder", would remain out of scope. However, the Act provides for a residual category: if no person who ultimately owns or controls the company is identified, the natural persons who hold the position of senior managing officials qualify as the ultimate beneficial owners. Caution is therefore in order: the absence of natural persons as shareholders, for example, is not a sufficient basis for concluding that a company remains out of scope of the UBO obligations.
Which companies and legal persons have to comply with the UBO obligations?
The UBO obligations apply inter alia to all companies, non-profit associations and foundations to which the Belgian Companies Code (article 14/1) or the act of 27 June 1921 regarding non-profit associations, foundations and European political parties and foundations (article 58/11) apply, except for European political parties and European political foundations. Partnerships ("maatschap"/"société simple"), which do not have legal personality, are also companies, and hence have to file information regarding their beneficial owners with the UBO Register. For legal persons and companies which have already opted in to the new Code of Companies and Associations ("CCA"), the CCA applies (article 1:33 and following), and the scope has not been changed.
By way of example, public companies or associations, to which the rules of general corporate law or the general rules for associations are of supplementary application, also fall within the scope of the UBO obligations.
Which obligations rest on these companies and legal persons and their governance bodies?
The aforementioned companies and legal persons are required to obtain and hold adequate, accurate and current information on their "ultimate beneficial owners". This includes, among other details, the name, date of birth, nationality and address of the ultimate beneficiaries and, for companies, the type and extent of the economic interest they hold.
The governance body must communicate this information to the UBO Register within one month.
Failure to comply with these obligations can result in the imposition of administrative and penal sanctions.
Who is the "ultimate beneficiary"?
The answer to this question depends on the legal form in question (see also article 4, 27° of the Act of 18 September 2017).
Companies
For companies, the ultimate beneficiaries are, in simplified terms: (i) the natural person(s) who own or control, directly or indirectly, a sufficient percentage of the shares or voting rights or ownership interest in the company; and (ii) the natural person(s) who control the company by other means.
At first sight, companies which are controlled by public authorities and do not have natural persons holding a sufficient percentage of the voting rights or ownership cannot identify such natural persons. However, the Act provides for a third category of "ultimate beneficiaries": ultimate beneficiaries are also the natural persons who hold the position of senior managing officials if, after all possible means have been exhausted (and without grounds for suspicion), no persons corresponding to (i) or (ii) could be identified (or if there is any doubt that the identified person(s) are the ultimate beneficiaries).
As a consequence, for public-law public limited liability companies to which the general rules of corporate law apply supplementary and which do not have shareholders who are natural persons at the end of the chain (or where these do not qualify as the ultimate beneficiaries), the data regarding the senior managing officials will have to be entered in the UBO Register.
(International) non-profit associations and foundations
For associations and foundations, the ultimate owners are, in simplified terms: (i) the persons who are members of the board of directors; (ii) the persons who are authorised to represent the association; (iii) the persons in charge of daily management; (iv) the founders of a foundation; (v) the (category of) natural persons in whose main interest the legal person was founded or operates; and (vi) any other natural person who, through other means, exercises the ultimate control over the (international) association or foundation.
When do you have to fulfil the obligations?
According to the website of the Federal Public Service Finance, the first registration of beneficial owners must be made by 30 September 2019 at the latest. This date should be considered as an ultimate grace period, as the legal provisions already apply.