Beneficial Ownership update – October 2019

Brexit is coming but so is 22 November!

The purpose of this article is to serve as a gentle reminder that Brexit is not the only crucial deadline looming on the horizon.

22 November is now just around the corner. From a company law perspective, this is the next key date to be aware of after 31 October.

D-Day – 22 November 2019

The deadline is fast approaching for companies to notify the Register of Beneficial Ownership (RBO) of the beneficial owner(s) of their company.

In a previous article on the subject, which can be found here, I set out the key information that companies are required to provide to the RBO.

Failure of a company to carry out its obligations under the regulations will constitute an offence under the regulations, and a company in breach may be liable to a fine of up to €500,000.

RBO – Frequently Asked Questions (FAQ’s)

Officers of any given company responsible for making submissions to the RBO are advised to read up on and be familiar with the FAQs section that can be found on the RBO website for guidance in determining the beneficial owners of their company.  The link to the FAQ section can be found here.

One question that is continually asked is, “who is my beneficial owner?”  An officer of the company will be well placed to answer this information once the FAQs have been considered. The FAQs set out in great detail how to determine who a beneficial owner is.

At a very minimum, it is recommended to consider the below FAQs sections:

• Section 4 – Defining who is a Beneficial Owner
• Section 5 – Beneficial Ownership Registration Requirements
• Section 11 – Using the RBO Register Portal
• Section 12 – Beneficial Owners who do not have a PPSN
• Section 14 – Reasons for RBO Beneficial Owners submission Rejection

Department of Employment Affairs and Social Protection

The reason why officers of a company should consult the FAQs is that it has been noted by the RBO that there have been a high number of submissions which have been, and continue to be rejected.

To minimise the chance of an RBO submission being rejected, it is prudent to check the details of the person who is identified as being the beneficial owner, before making a submission to the RBO.

Personal details such as name, date of birth and PPSN must be verified against the details the Department of Employment Affairs and Social Protection (DEASP) holds for the person who is identified as being the beneficial owner.

Coincidentally, the main reason submissions are being rejected appears to be for the following reasons:

• PPSN is incorrect;
• Date of Birth is incorrect; and
• The incorrect name or spelling of the name is being submitted.

A relatable example

Upon consulting the FAQs, the beneficial owner of Company X Ltd has been identified as being the 100% shareholder, Mr John M Smith. The company has been trying to make the RBO submission but the submission has been rejected 3 times in a row much to the bemusement of all involved.  John’s PPSN is correct, his date of birth is correct and the spelling of John M Smith is correct.

It is at this stage that a colleague recommends to John that he contacts the DEASP for help. He asks them to clarify how his details are registered with them.  They confirm his PPSN is correct and as he believes it to be and they confirm his date of birth is correct. However, they confirm that his name as registered with them, is John Michael Smith and not John M Smith.

John therefore must have registered his name with the DEASP as John Michael Smith and not John M Smith as he thought. So when Company X Ltd made the submission to the RBO with John’s name spelt John M Smith, the RBO rejected the submission on the basis that the name did not match how his name was registered in the DEASP.

Key takeaway

It is crucial that the officers of a company tasked with making the RBO submission, instruct the person/s identified as being the beneficial owner/s, to contact the DEASP to verify his/her details, namely their PPSN, spelling of their name and date of birth.  The details lodged on the RBO must mirror what are held by the DEASP.

For each beneficial owner who does not have a PPS number, a Form BEN2 – Declaration as to Verification of Identity – must be submitted to the Registrar to verify the person’s identity.

How can Reddy Charlton help?

If Reddy Charlton already look after the annual returns for your company we can arrange to make the required filing for you if required.  Please contact Maeve Walsh at mwalsh@reddycharlton.ie for assistance in this regard.  Please note that a board resolution from the directors of the company is required authorising Reddy Charlton to make the submission to the RBO on behalf of your company.