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A New Obligation for Companies Registered in France: Declaration of Beneficial Owners
A new regulation applicable as of August 1, 2017 concerns all unlisted French companies (Articles L.561-46 et seq. new of the Monetary and Financial Code).
Who is targeted?
This new regulation requires all commercial companies (SA, SAS, SARL ...), non-trading partnerships (SCI ...), and other entities (GIE ...) to identify the "beneficial owners" by registration in a special register kept by the Commercial Court.
The decree of June 12 , 2017 and the order of August 1, 2017 set out the procedures for implementing this new system and specify the operating conditions of the register of beneficial owners maintained by the registry of the Commercial Court.
Who must be registered as "beneficial owners"?
The decree of June 12, 2017 does not provide a definition for beneficial owner. Until a specific decree is enacted, we must therefore refer to the definition given in Article 561-1 of the Monetary and Financial Code, namely French or foreign individuals and whatever their country of residence is, who :
- either hold, directly or indirectly, more than 25% of the share capital or voting rights of the company,
- or have, by any other means, a power to control the management or governing bodies of the company or the general meeting of shareholders.
What information must be provided?
The statement, which must be dated and signed by the legal representative of the company must contain:
- The corporate name, the legal form, the address of the registered office and the unique identification number of the company followed by the mention of the corresponding Commercial Registry and the name of the city of the registry of the Commercial Court where the Company is registered.
- Identity (name, married name, pseudonym, surname), date and place of birth, nationality and personal address of the beneficiaries as well as the form of control exercised over the companies and the date on which the individuals became "beneficial owners" of the company.
The document to be filed with the registry is completed under the responsibility of the director, who is also the signatory.
When must the declaration of "Beneficial Owner " be filed?
Companies created since August 1, 2017 must register their Beneficial Owners at the time of incorporation and at the latest within 15 days from the issuance of the filing receipt of the “company creation file”.
For all companies (or other entities) registered in the Commercial Registry before August 1, 2017, the declarations must be filed before March 30, 2018 at the latest.
Besides, the decree of June 12, 2017 requires the filing of a new declaration within 30 days from the occurrence of any act or fact that makes it necessary to correct the information previously declared.
Penalties for non-filing the document or for filing an inaccurate or incomplete document are provided for by Article L.561-49 of the Monetary and Financial Code which states as follows:
"Failure to file with the Companies Registry the document relating to the beneficial owner required pursuant to the second paragraph of Article L. 561-46 or the submission of a document containing inaccurate or incomplete information shall be punished with six years in prison and a fine of € 7,500.
Individuals convicted of the offense provided for in the previous paragraph will be also sanctioned with the penalties of prohibition of management provided for in Article 131-27 of the Criminal Code and partial deprivation of civil and civic rights provided for in Section 2 of Article 131-26 of the same code.
Corporations found criminally liable under the conditions provided for in Article 121-2 of the Criminal Code for the offense provided for in the first paragraph shall be sentenced to pay the fine defined in Article 131-38 of the Criminal Code, and to the penalties provided for in Sections 1, 3, 4, 5, 6, 7 and 9 of Article 131-39 of the same code ".