The register of beneficial owners

The European fight against money laundering and the financing of terrorism has precipitated French company law into the era of transparency.

So, Ordinance No. 2016-1635 of 1 December 2016 transposed the provisions of the European directive into French law, by annexing the register of beneficial owners to the RCS.

Directive (EU) 2018/843 of the European Parliament and of the Council of 30 May 2018, amending the Directive on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, was proposed by the European Commission as early as July 2016, following the revelations of the “Panama Papers” case. It has strengthened the modalities for maintaining registers of beneficial owners. It was transposed into French law by Ordinance No. 2020-115 of 12 February 2020 And the Decree No. 2020-119 of February 12, 2020, published in the Official Journal on February 13, 2020.

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1. THE LEGAL EFFECTS OF THE ELECTRONIC SIGNATURE

1.1. DEFINITIONS

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1.1.1. DRESS

An integral part of the RCS, the register of beneficial owners lists natural persons directly or indirectly holding more than 25% of the capital or voting rights of a company or controlling it.

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1.1.2. DIRECT DETENTION

Direct ownership is characterized by the fact that the managing partner or shareholder is the direct owner of social rights.

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1.1.3. INDIRECT DETENTION

The holding of shares is said to be indirect when the manager owns a company that itself owns the social rights of the company concerned by the obligation to declare an effective beneficiary.

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1.1.4. CONCEPT OF CONTROL IN THE CONTEXT OF THE IDENTIFICATION OF THE BENEFICIAL OWNER

Article L. 233-3 of the Commercial Code distinguishes between cases in which it can be considered that there is a check. However, control in the context of the identification of the beneficial owner is understood only in the sense of 3° and 4° of I of article L.233-3 of the Commercial Code namely:

“I. Every person, natural or legal, is considered, for the purposes of sections 2 and 4 of this chapter, to be in control of another person:

3° When it in fact determines, through the voting rights it has, the decisions in the general meetings of this company;

4° When she is a partner or shareholder of this company and has the power to appoint or dismiss the majority of the members of the administrative, management or supervisory bodies of this company.”

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1.1.5. DETERMINATION OF THE EFFECTIVE BENEFICIARIES

Article L.561-2-2 of the Monetary and Financial Code defines beneficial owners as natural persons who own or control the company or on whose behalf an operation or activity is carried out.

Natural persons are considered to be such who:

• Either hold, directly or indirectly, more than 25% of the capital or voting rights of the company;

• Either exercise, by any other means, a power of control over the company, i.e. they in fact determine, through the voting rights they have, the decisions in the company's general meetings or that they have the power to appoint or remove the majority of the members of the company's administrative, management or supervisory bodies summer.

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1.1.6. DETERMINATION OF THE EFFECTIVE BENEFICIARY BY DEFAULT

When no natural person has been identified, the effective beneficiary to be declared is the legal representative of the company. The following are therefore aimed at:

• The manager of SNC, limited partnership, SARL or civil society;

• The CEO of SA has the board of directors;

• The sole managing director or the chairman of the management board of SA to management board;

• The president and, where applicable, the managing director of SAS.

If the legal representatives are legal persons, the beneficial owner is the natural person or persons who legally represent this legal entity pursuant to article R561-1 of the Monetary and Financial Code.

Deputy managing directors are excluded from this restrictive list set out in the text.

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1.2. SCOPE OF APPLICATION

The register of beneficial owners concerns:

• French companies (having their head office in a French department), civil, agricultural and commercial companies, excluding those whose titles are admitted to trading on a regulated market and public industrial and commercial establishments;

• Foreign commercial companies (whose head office is located outside the EU) with an establishment in France;

• Economic Interest Groupings (EIGs) and European Economic Interest Groupings (EEIAs);

• Other legal entities that must be registered with the RCS, such as associations that issue bonds or carry out manual exchange transactions.

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2. RBE - LEGAL FRAMEWORK

2.1 RBE - FORM TO FILL OUT

The format for declaring beneficial owners has changed since the adoption of the provisions transposing Directive (EU) 2018/843 into French law.

Indeed, the DIBE (document identifying beneficial owners) is no longer valid since the new Cerfa prints were made available on 09/03/2020.

Now, entities subject to the RBE must make this declaration when registering the company via the M'BE form (Cerfa 16062*01).

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2.2 CONTENT OF THE STATEMENT

Article R.561-56 of the Monetary and Financial Code states that the RBE must contain:

“1° With regard to the company or legal entity, its name or corporate name, its legal form, the address of its head office and, where applicable, its unique identification number supplemented by the mention RCS followed by the name of the city where the registry office where it is registered is located;

2° With regard to the effective beneficiary:

a) The name, usual name, pseudonym, first names, first names, date and place of birth, nationality, personal address of the natural person (s);

b) The nature and modalities of the control exercised over the company or legal entity mentioned in 1°, determined in accordance with articles R. 561-1, NO. 561-2 or R.561-3, as well as the extent of this control;

c) The date on which the natural person (s) became the beneficial owner of the company or legal entity mentioned in 1°.”

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2.3 REPORTING MODALITIES

It should be noted that:

• Companies and entities registered with the RCS prior to 01/08/2017 had a period expiring on 31/03/2018 to submit this information to the registry office.

• Companies and entities registered with the RCS as of 01/08/2017 had a period of 15 days from the date of registration to submit them. If they have not done so, they must do so in the future in the form of a declaration to the RCS and no longer by filing a document relating to the BE.

• For a Company or entity registered with the RCS that is not a collective investment: “information relating to the BE must be declared to the RC simultaneously with the application for registration in an M'BE interlayer following an M0 or M2 printout (registration on transfer of head office).

Since April 1, 2021, businesses can complete this formality through the electronic business formality desk. Note: this faculty will be mandatory in 2023.

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2.4 UPDATE

Once the initial declaration has been made, it should be kept up to date in accordance with article R.561-55 of the Monetary and Financial Code, which provides that a new declaration must be filed within 30 days of any fact or act that makes it necessary to rectify or supplement the information mentioned in the M'BE printout.

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2.5 RBE ADVERTISING

The procedures for accessing information in the register of beneficial owners have been amended (article L.561-46 of the Monetary and Financial Code).

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Thus, a full copy of the statement of information relating to beneficial owners can only be given to authorized persons, upon presentation of a request for communication:

• Or directly at the registry office, in paper form;

• Or through the intermediary of the GIE Infograft.

It follows from article R.561-58 of the Monetary and Financial Code that as part of the implementation of vigilance measures, persons subject to the fight against money laundering and the financing of terrorism have access to all information relating to beneficial owners provided that they have established a declaration signed by the legal representative of the subject person or by a person duly authorized within it.

This declaration includes the appointment of the taxable person and, where applicable, of his legal representative, and indicates that the taxable person belongs to one of the categories of persons defined in article L. 561-2 of the Monetary and Financial Code.

Access to information relating to beneficial owners is free, regardless of the methods of consultation or communication of this information.

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3. RBE - CONSEQUENCES OF THE DEFECT OR ABSENCE OF A DECLARATION

3.1. THE DECLARATION INJUNCTION PROCEDURE

The president of the commercial court has the power to order to declare information relating to beneficial owners to the RCS.

On his own initiative or at the request of the Public Prosecutor, or any person justifying an interest, he therefore has the power to issue orders in order to order any entity to proceed or have information relating to the effective beneficiaries reported to the RCS, if necessary under penalty.

He may also appoint a mandatary responsible for carrying out this declaration formality. When the person does not comply with the injunction issued to him, the registrar shall notify the public prosecutor.

This is a mechanism similar to that which exists for the injunction to file accounts, but the legal regime is not strictly identical.

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3.2. CRIMINAL SANCTIONS

Failure to comply with the obligation to report information relating to beneficial owners or a statement containing inaccurate or incomplete information constitutes a criminal offence.

This is punishable by heavy penalties, in application of article L.574-5 of the Commercial Code, whether for the natural person or the legal person responsible for the offense.

Natural persons face 6 months of imprisonment and a fine of 7,500 euros and additional penalties:

• Prohibition to manage;
• Partial deprivation of civil and civil rights.

Legal entities incur a maximum fine of 37,500 euros and additional penalties:

• Dissolution;

• Placement under judicial supervision;

• Closure of establishments;

• Exclusion of public contracts;

• Prohibition to make an offer to the public or to have its shares admitted on a regulated market (listed companies);

• Prohibition on the issuance of checks or the use of payment cards;

• Posting the decision or disseminating it by any means of communication

• electronic (publication on a website for example)