With effect from January 1, 2018, the Register of ultimate beneficial owners of the legal entities was established in the Czech Republic (hereinafter the “UBO Register”). The UBO register was implemented by the amendment to the Anti Money Laundry Act and the business corporations and cooperatives are obliged to register their ultimate beneficial owners (hereinafter the “UBO”) until January 1, 2019 the latest.
Motivation to meet the deadline is also the fact that until January 1, 2019, the proposal for registration of the UBO is exempt from any additional fees.
Who is the ultimate beneficial owner?
The ultimate beneficial owner is a natural person who has a legal or factual right to exercise, directly or indirectly, a decisive influence in a corporation, ie. the person who is able to enforce the most critical matters that affect the operation of the company.
- Generally, such person independently or together with other persons acting in agreement holds or controls more than 25% of voting rights in the corporation or holds more than 25% shares / revenue in the corporation.
- If the company is controlled by other companies, the UBO is the one on the top of the corporation structure.
- If the company is not able to identify the UBO, the members of the statutory body of the company are then considered as the UBO.
What are the consequences of not registering the UBO in the Register?
If the legal entities do not register their UBO until January 1, 2019, there are no direct sanctions to be faced at this moment. However, a failure to register the UBO may have a negative impact on the business activities of the company, such as applications for financial services, EU funds or when tendering for public procurement. Companies should also consider the possibility that the direct financial penalties will be adopted in the future for not registering the UBOs as this is a common procedure in other EU countries.
The UBO register is not a public register. The information of the UBO is not provided when the excerpt from the public register is obtained and it is not publicly disclosed.
We are ready to assist you with the registration of the UBO and discuss all your specific inquiries in this regard. In case you are interested in our consultancy, please do not hesitate to contact us.