New obligations of legal entities from 1 November 2018

New obligations

As of 1 November 2018, selected provisions of the amendment to the Act No. 52/2018 Coll. on the protection against legalization of proceeds from crime entered into force. As part of the changes introduced by this amendment, legal entities registered in the Commercial Register became obliged to ensure the entry of information about their beneficial owner into the Commercial Register. Companies registered into the Commercial Register prior to 31 October 2018 must ensure that such data is entered by way of a special form by 31 December 2019. Companies registered into the Commercial Register after 1 November 2018 must ensure that data concerning the beneficial owner is entered automatically upon the first registration.

From 1 November 2018, the same obligations as in the case of legal entities registered into the Commercial Register apply also to foundations, non-profit organizations and non-investment funds in relation to respective special registers.

Who is the beneficial owner?

The beneficial owner is any natural person who actually exercises ownership or control over a legal entity, a natural person – sole trader or a property association, and any natural person, for the benefit of whom these persons carry out their activities (for example a member, majority shareholder, dormant partner, top management). The full definition of the beneficial owner has been introduced by Section 6a of the Act on the protection against legalization of proceeds from crime.

Relation to the Register of public sector partners

The obligation of legal entities registered in the Commercial Register or, as the case may be, of foundations, non-profit organizations and non-investment funds to ensure the entry of their beneficial owners into the respective registers is principally a new and general obligation forming part of the regime of the Act on Commercial Register (or of special laws).

For this reason, the introduction of this obligation does not in any way affect the existing obligations of public sector partners to ensure the entry of their beneficial owners into the Register of public sector partners. This obligation is set out for public sector partners in laws in the area of public procurement, namely in specific cases foreseen by the Act No. 315/2016 Coll. on the Register of public sector partners and the Act No. 343/2015 Coll. on public procurement (for example when concluding contracts with contracting authorities)