The Companies Act (Register of Beneficial Owners)(Amendment) Regulations came into force on the 16th June 2020 by means of Legal Notice 247 of 2020 which has introduced a number of changes to further implement the Companies Act (Register of Beneficial Owners) Regulations, which had come into force on 1 January 2018 (hereinafter the “Regulations”).
This notice is being brought to the attention of all company officers and provides an overview of the regulatory changes being introduced.
By virtue of the 2020 Amendment Regulations further investigative powers have now been granted to the Registrar of Companies (the “Registrar”) as well as the requirement of filing an annual BO form has been introduced with immediate effect.
Whilst previously the Regulations imposed no obligation for the filing of supporting documentation in respect of a beneficial owner, the 2020 Amendment Regulations provides that when submitting a declaration containing information on the beneficial owner, a certified true copy of an official identification document for each of the beneficial owners (such as a passport or identity card) shall also be submitted to the Registrar.
1. New obligations are being introduced through the 2020 Amendment Regulations.
There have been a number of changes to the Companies Act (Register of Beneficial Owners) Regulations 2017 and the below represents the key amendments introduced.
a) Regulation 6A provides that upon each anniversary from its date of registration, every Maltese company is to file a return (in the form set out in the First Schedule of the Regulation) with the MBR confirming that no change in the details of beneficial ownership took place or identifying any change in such details, including name, country of residence and official identification document number. Such a return may be signed by any one director of the company or the company secretary and is to be filed within 42 days from the company’s anniversary date. Hence, when filing an annual return, companies are also to remember to file the annual BO form.
b) Regulation 6A(3) further provides that where there is a change in the senior managing officials listed by the company (and in the absence of an identifiable beneficial owner), the company is obliged to submit a notice of such change to the MBR within fourteen days from the effective date of the change. Companies which fail to abide by the above obligations will be subject to a lump sum penalty of €5,000 together with a daily penalty of €100 until the breach is remedied.
c) Regulation 6A(4) provides that when there occurs at any time, any change in details on beneficial owners/ Senior managing Officials such as name, country of residence or official identification document number, the company may deliver to the Registrar for registration a return, in the form set out in the First Schedule of the Regulations. When this change involves a change in name or official identification document number, the company shall also submit a certified true copy of the identification document of the beneficial owner.
2. Powers of the Registrar
The powers of the Registrar have now been extended.
Regulation 9 of the Regulations already provided for the power of the Registrar to refuse to register any document of a company where the information on beneficial ownership provided was not accurate or up to date. The 2020 Amendment Regulations further provide that:
a) The Registrar may restrict new company incorporations whose proposed directors already act as directors in other Maltese companies that failed to submit information on beneficial owners.
b) He is now empowered to take the necessary steps and ask for any information or documentation he may deem necessary to ascertain the correctness of the beneficial information submitted. Failure by a Maltese company to comply, within one month from the date of the request, with any of the requests made by the Registrar may lead to the company’s name being struck off the MBR’s books and its assets devolving upon the Government of Malta. Notwithstanding this, the rights and responsibilities of the directors and officers of the company shall continue to have effect and may be enforced. The Court may order the restoration of the Company before expiration of 5 years from the publication of the afore-mentioned notice.
c) In order to ensure accurate and current information, the 2020 Amendment Regulations implement the right of the Registrar to conduct on-sight inspections at the registered office of the Company in order to ascertain the accuracy of the beneficial ownership information provided to the MBR. The right of the Registrar to verify such information shall not be restricted, obstructed, or precluded in any manner. The Registrar shall have access to any relevant documentation or any other information relating to information on beneficial ownership of any company and he may also take copies of the documents made available to him. If, following an inspection, the Registrar deems it necessary to update the beneficial ownership information, every officer shall now be liable to a penalty not exceeding €100,000.
In addition to the above amendments, some clarifications have now been made to the statutory form BO1 and form BO2 which are to be submitted when incorporating a new company in Malta or following any change to the share capital or directors (as applicable) of a Maltese company to reflect the above changes.
Furthermore, the administrative penalties have also been increased as per table here.