UBO is the abbreviation for Ultimate Beneficial Owner. This is the natural person (or persons) who is the ultimate beneficiary of a company. From 27 September 2020, organisations are required to register their UBO in the new UBO register. Why is this actually necessary? Who has to do it? And how does registration in the register work in practice? Below is a brief summary of this new register.
Who is the UBO within my company?
The UBO is the person who is the ultimate beneficiary or who has ultimate control over the company. The Dutch Anti-Money Laundering and Anti-Terrorist Financing Act (Wwft) states that, in the case of a BV or NV, you are in any case a UBO if you have a (indirect) interest of at least 25% of the shares, the voting rights or the ownership interest. This can therefore also be several people per company.
UBO register for partnerships, associations and foundations.
The above also applies to other types of companies, such as foundations, associations, partnerships, etc. However, in that case one is also a UBO if, directly or indirectly, more than 25% of the votes can be exercised in decision-making regarding amendments to the articles of association. In the case of partnerships, this concerns an amendment to the agreement underlying the partnership.
Is no UBO identifiable on the basis of the above in the case of other types of companies? Then, for these other companies, the person who can exercise actual control over the company is the designated UBO.
No one to designate as UBO?
If no one within the company meets the above criteria, the same applies to every company. The UBO is then the natural person (or persons) belonging to the senior management of the company (in the Netherlands, for a capital company, this is, for example, the entire board). There is therefore always at least 1 UBO. If you are unsure who the UBO (or UBOs) is/are within the company, please contact us.
Why a new UBO register in the first place?
The new register stems from European legislation (specifically the Fourth Anti-Money Laundering Directive (EU/2015/849)) and is intended to combat money laundering and terrorist financing. A register should ensure transparency about who is pulling the strings behind the scenes. This means criminals can no longer create a smokescreen using a multitude of legal entities. The register immediately shows who the ultimate owner is. An additional advantage is that, as a business relation, one can see even better with whom one is doing business (or precisely not doing business). The public part of the register will contain the following information:
- First name + surname;
- Date of birth;
- Nationality;
- Country of residence;
- Nature and extent of the interest.
From 27 September 2020, you can view this data by ordering a KVK UBO register extract online for €2.50. This does require an access code, which you can easily request here . Companies are, however, given 18 months to submit this data, so on 27 September 2020 the register will not yet contain much information.
Which organisations must register?
1.5 million organisations in the Netherlands are subject to this new register. Registering the UBO is mandatory for the following legal forms:
- BVs and NVs (not listed);
- Foundations;
- Associations (with full legal capacity and with limited legal capacity provided they run a business);
- Mutual insurance associations (OWM);
- Cooperatives;
- Partnerships, such as general partnerships (maatschap), VOFs and CVs (the legislation on partnerships will soon be overhauled, read here our blog about this);
- Shipping companies;
- European companies (SE, SCE, EEIG);
Listed companies and their 100% subsidiaries are exempt from the obligation to register their UBOs. After all, they are already subject to the strict rules of the Transparency Directive.
When and how can I register the UBO of our organisation?
The register opens for registrations on 27 September 2020. However, there is definitely no rush. Organisations have until 27 March 2022 to complete the registration. The register is managed by the Chamber of Commerce (KvK). In due course, they will send a letter to all organisations that are required to register.
Sanctions.
Failure to comply with the registration obligation carries various penalties, such as imprisonment of up to six months, a fine of up to 20,500 euros or community service. This penalty can apply to the company, but also to the UBO!
To avoid taking any risks, it is therefore best to register the UBO. The person authorised to sign within the organisation can, from 27 September 2020, submit the registration on this website.
No KvK number without UBO registration!
Are you starting a new company from 27 September 2020? Then you will only receive a KvK number once you have registered the UBO. All new companies will therefore automatically be included in the register.
Special duties for foundations.
After registration, the obligations under the act implementing the UBO register are met, except for foundations. The board of a foundation is required to include, in a register within its own administration, all beneficiaries who receive a distribution of 25% or less of the amounts distributed in a given financial year.
Would you like to stay informed of this new obligation for businesses and of other relevant legal developments for SMEs? Then sign up for our monthly Legal Alert newsletter and follow our company page on LinkedIn.
Questions or advice?
The corporate legal advisers at The Legal Company specialise in company law. If you are unsure who the UBO in your organisation is, or have other questions, please contact us by emailing info@thelegalcompany.nl, calling 020-3450152 or filling in our contact form.
