Reform of the Transparency Register forces action
In 2017, the Transparency Register for Germany (transparenzregister.de) was introduced and has since been gradually adapted further. As of August 01, 2021, the reform of the Transparency Register has taken full effect. It was on this effective date that the Transparency Register became a complete register.
The previously voluntary entries of beneficial owners has now become mandatory. These are also urgently required, as the presumption of notification (Section 20 (2) AMLA) – the dispensability of registration if the information on the economic beneficial owners was already apparent from other registers, such as the German Commercial Register or the Register of Associations – has now ceased to apply.
All companies (including GmbHs, AGs, foundations, associations) should now urgently ensure that the beneficial owner(s) are identified and entered in the Transparency Register accordingly.
What is a beneficial owner?
Beneficial owners are natural persons who (directly or indirectly) hold more than 25 percent of the capital shares in a company or control more than 25 percent of the voting rights or who exercise a comparable controlling influence in some other way (e.g. on the basis of a voting rights pool). These persons must be registered in the Transparency Register pursuant to the German Transparency Financial Information Act (TraFinG).
Identifying the beneficial owner is not always easy, particularly in cases in which there are multiple levels of ownership.
What information belongs in the Transparency Register?
Corporations and nonprofit entities must provide a notification of their beneficial owner(s). This includes information on the
- First and last name,
- Address,
- Residence,
- Date of birth,
- All nationalities and
- The nature and extent of the economic interest.
There is also a continuous obligation to update in the event of changes in the shareholder structure or also in the event of changes in managing directors, provided that these are to be classified as notional beneficial owners.
Transition phase in only a few months
For companies whose reporting obligation was deemed to have been fulfilled under the previous legal situation due to the notification of legal fiction, different transitional periods apply for entry in the Transparency Register pursuant to Section 59 (8) of the Money Laundering Act (GwG), as amended, depending on the legal form:
- until March 31, 2022: Public limited company (AG), societas Europaea (SE), limited commercial partnership (KGaA)
- until June 30, 2022: Limited liability company (GmbH), cooperative, European Cooperative, partnerships
- until December 31, 2022: all other legal forms
So not much time remains to carry out all the entries.
What are the penalties?
Organisations or companies that fail to register their beneficial owner(s) in the Transparency Register are threatened with heavy fines. The Federal Office of Administration, as the supervisory authority, is guided by a catalogue of fines linked to turnover. In the case of a first offence, a fine of up to 100,000 euros per legal entity may be imposed.
We recommend that you carefully verify once more whether your organisation has already complied with the entry obligation for the Transparency Register and which data may need to be amended or resubmitted. Our experienced team will be happy to assist you.
WINHELLER supports you in everything related to the Transparency Register
Our team will carry out the registration procedure for the Transparency Register for you and identify the beneficial owner(s) accordingly. We will
- answer all your questions about the Transparency Register,
- review your shareholding structure and identify your beneficial owner(s),
- register this/these person(s) immediately in the Transparency Register for Germany and
- thus ensure compliance with the legal requirements.
We are happy to offer you this service at a fair, all-inclusive price. Please contact us at any time for a binding offer. Our expert attorneys will support you. The best way to reach us is by email (info@winheller.com) or by telephone (+ 49 69 76 75 77 80).
Continue Reading:
Compliance Management in Germany
Money Laundering Act: New Notification Requirements for Companies and NPOs in Germany
