From France: New Obligation for French Companies to Declare Beneficial Owner(s)
Frédéric Bucher - STCPartners, a member firm of Andersen Global
As of August 1, 2017, all unlisted French companies must declare their beneficial owners upon registration or at any time when there is a change. Companies already registered have until April 1, 2018, to comply with this new regulation.
The beneficial owner of a legal entity subject to this regulation (eg: an unlisted company registered in France) is the natural person(s) who ultimately controls that entity at the time of declaration, and/or the natural person(s) on whose behalf a transaction is being conducted. In practice, where the legal entity is an unlisted company, or an alternative investment fund (with legal personality), the beneficial owner of the operation is the natural person(s) who directly or indirectly holds more than 25% of the company’s capital or voting rights or interest in the investment fund, or by any other means exercises power of control in the management or administrative bodies of the company or the general meeting of its shareholders or, where applicable, the management company or portfolio management company representing it. Note that among the other entities subject to this regulation are the trust or other comparable legal arrangements under a foreign law, and secondary establishments of a foreign company in France.
How do I declare?
It shall be mandatory for a legal entity subject to this regulation to draw up a document, dated and signed by the entity’s legal representative, including all of the entity and its beneficial owners’ identification details. This document must be filed with the registry of the Commercial Court at the time of application for registration or within 15 days. A new document is filed within 30 days following any fact or event, such as a new beneficial owner, which requires correction of, or addition to, the information contained therein.
Who can access the identity of declared beneficial owners?
The document containing details of the beneficial owner is not public, but some persons may be authorized to obtain the information.
What is the sanction?
The penalty is six months’ imprisonment and a fine of €7,500.