Pursuant to the Money Laundering and Terrorist Financing Act entities specified in the provisions of the Act, including limited liability companies, are obliged to submit information on the beneficial owners of such companies to a public registry – the Central Register of Beneficial Owners (CRBR).
Newly established companies are required to submit information regarding beneficial owners within 14 business days of their registration in the National Court Register. In the event of changes to the information disclosed in the CRBR, such changes must be reported within 14 business days of their occurrence.
Beneficial owner
The ‘beneficial owner’ is a natural person or natural persons who control, directly or indirectly, a company through their powers arising from legal or factual circumstances and enabling them to have a decisive influence on the activities or actions taken by the company, or a natural person or natural persons on behalf of whom economic relationships are established or an occasional transaction is performed within the meaning of the Act.
Pursuant to the provisions of the Act, in the case of a limited liability company the following entities, in particular, may be the beneficial owners:
- a natural person who is a shareholder of the company and owns more than 25% of the total number of shares in that company,
- a natural person who has more than 25% of the total number of votes in the company’s decision-making body, including as a pledgee or a user or on the basis of agreements with other persons entitled to vote,
- a natural person controlling a legal person or legal persons who jointly own more than 25% of the total number of shares or jointly have more than 25% of the total number of votes in the company’s decision-making body, including as a pledgee or a user or on the basis of agreements with other persons entitled to vote,
- a natural person controlling the company by having the status of the dominant entity in relation to that company (in accordance with Art. 3 par. 1(37) of the Accounting Act), or
- a natural person with an executive position in the event of a documented lack of possibility of determining, or doubts regarding, the identity of the aforementioned natural persons and in the event of the lack of suspicions concerning money laundering or terrorist financing.
In case of companies, the shareholders of which are legal persons, it is necessary to check, whether there is an indirect beneficial owner (being a natural person), fulfilling the abovementioned criteria through connections to companies situated in the structure above the given Company. In the case of companies with a complex, multi-level ownership structure, where legal entities that indirectly hold shares in a Polish company operate in different jurisdictions, determining the beneficial owner is often a difficult task.
Information to be submitted
The companies are obliged to submit the following information to the CRBR:
a) the company’s identification data:
- name (business name),
- organisational form,
- registered office address,
- number in the National Court Register (KRS),
- Tax Identification Number (NIP),
b) the identification data of the beneficial owner:
- first name and surname,
- every citizenship held,
- country of residence,
- Personal Identification Number (PESEL) or date of birth – in the case of persons who do not have the PESEL number,
- information on the size and nature of interest or rights held by the beneficial owner.
Notifications to the CRBR shall be submitted by persons authorized to represent the Company (members of the management board in accordance with the rules of representation). The personal data of the persons filing the notification to the Register, such as: first and last name, citizenship, country of residence, PESEL number, or date of birth (for persons without a PESEL number), and the position held, are also disclosed in the Register.
Why is it important to correctly identify the beneficial owner and update the data in the CRBR in a timely manner?
a) The accuracy of the identification of the beneficial owner is subject to periodic verification by banks, financial institutions, auditors, lawyers providing legal assistance to entities, and other obligated institutions. The absence of up-to-date and accurate data in the CRBR may lead to:
- the freezing of bank accounts,
- termination of business relationships, as well as
- the institution’s reporting of any discrepancies between its findings and the data from the CRBR to the Minister of Finance.
b) Suppliers and customers are increasingly verifying the identity of the beneficial owner due to internal requirements arising from compliance procedures and ESG strategies. Failure to maintain up-to-date and accurate data in the CRBR may result in the loss of a supplier or customer.
c) Failure to comply with the obligation to update data in the CRBR registry may also result in the sanctions described below.
Sanctions
a) Companies that fail to fulfil the obligation to report or update information in the CRBR within the time limit set out in the Act, or that have provided information inconsistent with the facts, will be subject to a fine of up to the amount of PLN 1,000,000.00.
b) The person filing the information on beneficial owners and updating such information is liable for damage caused as a result of submitting untrue data to the CRBR, and for failure to submit within the statutory time limit the data and changes of data that must be entered into the CRBR, unless such damage was caused as a result of force majeure or through the sole fault of the injured party or a third party for whom the person submitting and updating the information on beneficial owners is not responsible.
Recommended actions
The capital groups possessing subsidiaries in Poland have often a complicated structure that are subject to change relatively frequently. Taking that into consideration it is recommended to implement appropriate procedures within the company and continuously monitor the structure and track any changes that could affect the identification of beneficial owners, so that the necessary updates of the entries in the CRBR may be done within the appropriate deadline.
Wiewiórski Legal offers support in the matters related to the Central Register of Beneficial Owners. Our specialists can help you in particular with identification or verification the accuracy of the of the beneficial owner’s identification, as well as with reporting and updating information in the register.
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