Central Register of Beneficial Owners – practical aspects of obligatory registration (note: the deadline for registration is 13 April 2020)

Entrepreneurs' law

March 2 2020/ k-admin

The Central Register of Beneficial Owners (hereinafter referred to as “Register“) was established by the Act on Combating Money Laundering and Financing of Terrorism of 1 March 2018 (ustawa o przeciwdziałaniu praniu pieniędzy oraz finansowaniu terroryzmu, hereinafter referred to as „the Act”). The Act implements Directive 2015/849 of 20 May 2015 regulating the prevention of money laundering and terrorist financing (called AMLD IV). Registers with a similar function to the Polish Register have been established in all EU Member States. It is worth noting that the above-mentioned directive allows the creation of a register of beneficial owners connected with the register of entrepreneurs (in Poland: the register of entrepreneurs of the National Court Register – rejestr przedsiębiorców Krajowego Rejestru Sądowego), but the Polish legislator decided to form a separate register.

Registration in the Register is obligatory for:

  1. registered partnerships (spółki jawne),
  2. limited partnerships (spółki komandytowe),
  3. limited joint-stock partnerships (spółki komandytowo-akcyjne),
  4. limited liability companies (spółki z ograniczoną odpowiedzialnością),
  5. joint stock companies (spółki akcyjne) – excluding public companies.

Let us remember that professional partnerships are not subject to registration. The Act determines the information to be reported to the Register, these are the identification details of the company, identification details of all persons authorised to represent the company, and above all, information on who is the actual beneficiary of the company.

According to the statutory definition of the beneficial owner (article 2 section 2 point 1 of the Act), the beneficial owner is always the natural person or the natural persons who directly or indirectly control the entity and exercise decisive influence over its operation – both due to the legal circumstances as well as the factual ones. The Act indicates five prerequisites for having a status of the beneficial owner – the first one is the ownership right of more than 25% of shares in a given company, the next one is possession of more than 25% of votes in a decision-making body of a given company. The statutory definition is adjusted to the specifics of capital companies (limited liability and joint stock companies), which makes it hard to apply it to the partnerships. It is worth pointing out that when determining the beneficial owner of a given company, it is recommended to adopt a comprehensive approach and to verify all possible premises which may lead to having the status of the beneficial owner.

The Register is maintained in an electronic form and is available on the website: https://crbr.podatki.gov.pl/adcrbr/. The register is open to public, for verification of the beneficial owners of any company subject to the obligation of registration, we only need its NIP (number of tax identification).

When planning a registration in the Register, the following issues have to be considered:

  1. Application is free of charge.
  2. Application can be made only in an electronic form – the application must be signed with a qualified electronic signature or a trusted profile ePUAP.
  3. Application may be made only by a person authorized to represent the company (depending on the type of company: partners or members of the management board). The Ministry of Finance on its website informs that the application can also be signed by a commercial proxy (prokurent – https://www.gov.pl/web/finanse/zgloszenie-informacji-do-centralnego-rejestru- beneficjentow-rzeczywistych). There is no doubt that currently application cannot be made by an attorney (including an attorney-at-law (radca prawny) or an advocate (adwokat)).
  4. The application is submitted under pain of criminal liability.

The provisions of the Act regarding the Register have entered into force on 13 October 2019. From that date, each newly established company must be registered in the Register within 7 days from the date of registration in the register of entrepreneurs of the National Court Register (rejestr przedsiębiorców KRS). Companies registered in the register of entrepreneurs before 13 October 2019 have to make an entry to the Register by 13 April 2020. Importantly, any changes in information mandatorily submitted to the Register are subject to obligatory notification within 7 days of their occurrence. Undoubtedly, the time limit of 7 days for registration in the Register, as well as the same time limit for notification of changes, should be assessed as far too short. It is worth imagining a situation of change of shareholder in a parent company which subsidiary is registered in Poland. Within 7 days the members of the management board of a Polish company will often not even be informed about a change that requires notification.

Failure to register information about company in the Register on time may result in a fine imposed on company up to PLN 1,000,000.00.

Additionally, it should be stressed that the Register is maintained only in  Polish. Taking into consideration the numerous foreigners who are persons authorised to represent Polish companies and who have to independently sign the application to the Register in Polish (and under pain of criminal liability), the Register should also be maintained in the English language version.

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