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NEWS

12-02-2018

 

Beneficial owner: risks and uncertainties

In the context of the fight against money laundering and the financing of terrorism, the legislator has instituted new obligations with regard to companies, under the terms of ordinance no. 2016-1635 dated December 1, 2016 and an implementing decree no. 2017-1094 of June 12, 2017, creating articles L. 561-46 and R. 561-55 et seq. of the Monetary and Financial Code.

 

These new provisions, the result of the transposition into domestic law of the European anti-money laundering directive 2015/849 of May 20, 2015, make unlisted companies and legal entities registered in the Trade and Companies Register responsible fortwo new bonds:

 

-    an obligation to obtain and keep accurate and up-to-date information about their beneficial owners,

 

-     an obligation tocommunicationto the Registry of the Tribunal, for the purpose of beingappended to the RCS, a document relating to the beneficial owners, containing the elements of identification and the personal domicile of the latter, as well as the methods of control exercised.

 

The obligation to communicate information concerning beneficial owners has caused much ink to flow, both in the national press and in specialized journals, in particular because of the risk of erosion of the confidentiality relating to the identity of partners or shareholders. companies registered with the RCS.

 

It should, however, be emphasized that, notwithstanding its filing at the Registry of the Court,this document is not public, only certain persons who may have access to it, such as the judicial authorities, the agents of the customs administration or the administration of public finances or any person justifying a legitimate interest and authorized by the judge responsible for monitoring the RCS.

 

To date, these new obligations raise questions, starting with the notion of beneficial owner itself.

 

The Monetary and Financial Code defines the beneficial owner as thephysical persons:

 

(i)    either who ultimately directly or indirectly control the "Client",

 

(ii)    is for which a transaction is carried out or an activity is carried out.

 

Article R. 561-1 of the same Code supplements this definition by specifying that when the "customer" is a company, the beneficial owner of the transaction is thephysical personswho :

 

(i)    eitherhold, directly or indirectly,more than 25%of the company's capital or voting rights,

 

(ii)    eitherexercise, by any other means, apower of controlon the management, administration or management bodies of the company or on the general meeting of its partners.

 

Apart from the fact that these provisions, initially applicable to the due diligence obligations attached to certain professionals (banking establishments, management companies, etc.), prove to be unsuitable because of the reference to the concept of "customer", the criteria currently used to determine beneficial owner suffer from inaccuracies.

 

Firstly, in the event of a chain of ownership, the method for calculating the crossing of the threshold of indirect ownership of 25% of the capital or voting rights is not specified by the current texts, the latter not deciding the point of whether it is appropriate:

 

(a) cc781905-5cde-3194-bb3b-136bad5cf58d_   to make the proceeds of indirect holdings (example: a natural person holding 39% of company A, which owns 60% of company B, is not the beneficial owner of company B because 39% x 60% < 25%), or

 

(b)     to reason by majority stake (example: a natural person holding 51% of company A, which holds 26% of company B, is the beneficial owner of company B because the indirect holding of more than 25% of the capital of company B by the natural person lies in the fact that he holds a majority stake in company A ).

 

Next, the concept of "controlling power" referred to in Article R. 561-1 of the Monetary and Financial Code is not defined by the texts. In the absence of details provided by the regulatory authorities, it appears from the provisions of European Directive 2015/849 of May 20, 2015 that the criteria applicable to the preparation of the consolidated financial statements could be retained (Article L. 233-16 of the French Commercial Code ) but the majority doctrine seems to recommend a reference to the definition of control in Article L. 233-3 of the Commercial Code.

 

Beyond these questions surrounding the definition of the beneficial owner, there are a certain number of specific situations which complicate the identification of the beneficial owner, such as the case of spouses married under a community regime.

 

Pursuant to the rules relating to joint-stock companies, the contribution of common property made by a spouse to a company confers the status of partner only on this contributing spouse. On the other hand, the shares received in exchange for this contribution come under the property of the community pursuant to the rules relating to matrimonial property regimes.

 

The two spouses married under a community regime are therefore owners of the shares of the company, notwithstanding the fact that only the contributing spouse holds the status of partner.

 

Also, when the participation subscribed by the spouse turns out to be greater than 25%, it will be legitimate to wonder whether the beneficial owner is only the contributing spouse, or the two spouses married under the regime. community.

 

Similarly, the existence of a family group within the capital of a company can make it difficult to identify the beneficial owner.

 

Thus, according to the National Council of Clerks of Commercial Courts, when two married people and their children come to hold together more than 25% of the share capital and/or voting rights, each of the members of this family group must be identified and declared as the beneficial owner, even in the absence of an agreement or shareholders' pact concluded between them.

 

There would thus be a presumption of action in concert between the members of a family group. However, to our knowledge, neither the texts of the Monetary and Financial Code nor the provisions of the European directive justify such an interpretation.

 

In view of all the difficulties caused by the uncertainties surrounding the concept of beneficial owner, a decree aimed at clarifying its contours is currently being prepared (the publication of the decree having initially been announced for last November before be deferred).

 

As a reminder, companies incorporated since August 1, 2017 have a period of 15 days from the issue of the receipt for filing the registration file to communicate to the Registry the document relating to the beneficial owner, companies registered before August 1 August 2017, which must submit the said document before April 1, 2018.

 

Failure to comply with these new obligations being penalized (fine of 7,500 euros and six months' imprisonment in particular), it is to be hoped that the decree will be published before the date of April 1, 2018 and that it will establish an appropriate and precise definition of notion of beneficial owner, in order to prevent the imprecision of the texts from posing a new criminal risk to the company and its manager.

 

Fabrice Segurel, lawyer, Cabinet ARTLEX, Nantes

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