Ultimate Beneficiary Declaration: To trust is to know

2 min read

Authors:

Shuli Chi

Eric Le Sueur

Harry Maxwell

Ultimate Beneficiary Declaration: To trust is to know

REF: 056:

After the scandals of the early 2000’s, and to prevent money laundering, a KYC (meaning “Know Your Customer”) procedure became mandatory in many countries, including France, the UK and the USA.

KYC applies to all participants of the financial services industry, from banks to accountants and auditors. Before any engagement, the professional must conduct appropriate research into the client’s background: where the funds come from, and who is the ultimate beneficiary of the transaction/company proceeds, etc.

The ‘Loi Sapin II’ of 9^th December 2016 lead to the creation of the Ultimate Beneficiaries Register, bringing in new rules for declaring Ultimate Beneficiaries.

Who is deemed to be an ultimate beneficiary?

There are 3 categories of ultimate beneficiaries:

Private individuals who own, directly or indirectly (through another company), more than 25% of the company’s shares or voting rights
Private individuals who by any other means have influence on any (or all) of the company’s management bodies (Members of the Board, Shareholders assembly, …)
Or, in the case where it would be impossible to determine such an individual, the company’s legal representative is deemed the ultimate beneficiary.

Who must file this declaration?

Companies (such as SAs, SARLs or SASs), charities and foundations based in France, and also foreign companies who have a permanent establishment in France.

Of course, Maupard can take care of this for you.

Is there a deadline?

It depends on the date the company was created:

Before 2^nd August 2017: these companies have until 1^st April 2018 to file their Ultimate Beneficiary Declaration
After 2^nd August 2017: this declaration has been added to the required formalities to incorporate a company.

Are there penalties?

Yes! Companies that have not complied with this obligation before the deadline expose themselves to a €7,500 fine and up to 6 months imprisonment, because as of 1^st April 2018, not disclosing this information will be a crime.