NEWS

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13-06-2018

 

Beneficial owners : publication of the long-awaited decree 

 

In the context of our previous article devoted to this subject (published on our website on February 12, 2018), we hoped that the decree that should clarify the notion of beneficial owner would appear before April 1, 2018, the deadline for filing with the Registry of the Commercial court competent for declarations relating to beneficial owners. 

 

It was finally, on April 20, that decree no. money laundering and terrorist financing was published in the Official Journal.

 

The provisions of the Decree relating to the definition of the beneficial owner are intended to apply from April 21, 2018.

 

For the record, in the old version of Article R. 561-1 of the Monetary and Financial Code, the beneficial owner was defined as the natural person or persons who (i) hold, directly or indirectly, more than 25% of the capital and/or more than 25% of the voting rights, or (ii) exercise, by any other means, a power of control over the management, administration or management bodies of the company or over the general meeting of its associates.

 

If the Decree does not answer all the questions raised by this much criticized new obligation, it has the merit of clarifying the concept of beneficial owner mainly on two points.

 

Firstly, if the criterion linked to the direct or indirect holding of more than 25% of the capital or voting rights remains unchanged, the Decree clarifies the concept of "controlling power" referred to in Article R. 561-1 of the Monetary and Financial Code, which was not defined in the old version of the text. 

 

From now on, the power of control must be understood in the sense of 3° and 4° of I of Article L. 233-3 of the Commercial Code. The power of control thus refers (i) to any person who in fact determines, through the voting rights at his disposal, the decisions in the general meetings of the company and/or (ii) to the partners or shareholders having the power to appoint or to dismiss the majority of the members of the company's administrative, management or supervisory bodies.

 

This welcome clarification thus removes the vagueness that surrounded this notion of "power of control" by limiting to two scenarios already known, the person who must be declared as the beneficial owner in application of this criterion._cc781905- 5cde-3194-bb3b-136bad5cf58d_

 

Secondly, before the publication of the Decree, no French legal provision envisaged the hypothesis in which the identification of the beneficial owner proved unsuccessful. 

 

Only Directive No. 2015/849 of May 20, 2015 (in application of which the provisions relating to the beneficial owner were transposed into domestic law) provided a solution in this case, namely, the possibility of declaring as beneficiary effective legal representative of the company.

 

The Clerks of the Commercial Courts had anticipated (despite any internal legal basis) the possibility of declaring by default the legal representative of the entity on the model forms made available to declaring companies._cc781905-5cde-3194-bb3b- 136bad5cf58d_

 

From now on, in such a case, article R. 561-1 of the Monetary and Financial Code expressly envisages the option of declaring the legal representative of the company when no natural person has been able to be identified, while specifying for each social form of company the person intended to be declared.

 

The taking into account of this hypothesis by the Decree thus makes it possible to legalize the avant-garde practice of the Clerks of the Commercial Courts.

 

On the other hand, we can only deplore that the Decree does not answer all the questions highlighted by the practitioners and some of which were exposed in our previous article, the existing uncertainty in certain situations can only increase the legal insecurity and the criminal risk with regard to the leader.