Welcome to Query Of The Week
Welcome to this week’s Query Of The Week. Each week our technical team respond to a huge number of client queries and in this segment, we share with you the most common questions that keep coming up time and time again.
In this week’s Query Of The Week, John Murphy discusses the most common co sec issues in 2019. John talks you through three common questions about the Register of Beneficial Ownership.
We hope you enjoy this week’s, Query Of The Week.
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|Webinar Duration||1 Hour|
|Presenter||John Murphy – OmniPro|
Query Of The Week – Video Transcript
(Please note that this is a direct unedited transcript of the spoken word as recorded on the video)
So, this week we’re going to look at the Beneficial Ownership Register.
Obviously, you can’t have top Co Sec issues for 2019 without talking about the Beneficial Ownership Register. So I’m going to give an example of some of the questions that have come into us in relation to who is disclosed or who is filing with the RBO.
The first question that came in was: a subsidiary company was owned by a parent company here in Ireland, and the parent company in Ireland had four shareholders who owned 25 per cent of the share capital each, so under the Beneficial Ownership Registers, which have to be filed by the 22nd of November of this year, what the legislation says is effectively going to say, first of all for the subsidiary, who are the beneficial ownership owners?
The beneficial owners are, effectively, anyone that holds over 25 per cent, plus one share, or over 25 per cent of the share capital of the company, So, in that particular case, the legislation makes it clear that you actually have to go down to an actual person, so the subsidiary is obviously owned by a corporate body, they can’t be the beneficial ownership, so we have to look through the corporate body and see who are the beneficial owners of parent. And we look through the beneficial owners of the parent. In this particular case, we can see that there is nobody that owns over 25 per cent, so, therefore, in that particular case, the first test isn’t met so we can’t identify beneficial ownership there.
What the legislation says is, where you can’t identify the beneficial ownership owner because there’s no one who has greater than 25 per cent, well then you go back to subsidiary and then deem it to be the CEO and the board of directors, effectively, the management officials.
So the answer to that particular question was, the beneficial owners that you will put in your RBO or as the register owners will be the board of directors of the subsidiary company.
Another question which we got in relation to the RBO was: I have a company that has two class of shares. One of the class of shares are owned by two individuals, 50, 50, ordinary share capital. And the other class of share is a golden share, so it gives the holder of that share the power to appoint and remove the board of directors. That there is held by another entity, and that entity is held by two different parties on a 50, 50 basis. So, who is the beneficial owner here?
In this particular case this company, first test, you have to look and see, well, look, who owns greater than 25 per cent? So, this company, the ordinary shareholders are obviously the holders, they have the control, so they’re down as the beneficial owners on the Beneficial Ownership Register. But also, the legislation said, it’s the 25 per cent test and it’s controlled by any other means. The control here by any other means will be that person that holds the golden share.
In this case, a corporate entity holds this golden share in this company, so, once again, we look through the corporate entity and we go to the shareholders of the entity that holds the golden share, and if they have, like in our example, they were greater than 25 per cent, so we would have to disclose them as the beneficial owners as well. So, technically we’ve got four people as being the owners of that company in that example, that being the two individuals that own 50 per cent each of the ordinary share capital, then the corporate entity who holds the golden share, the owners of that company, that own greater than 25 per cent share capital under the two rules rule. One being who owns greater than 25 per cent, rules two is who was controlled by any other means and a golden share, by having the ability to appoint and remove the board of directors, it gives them control. So then we have to go and look at the owners of the entity that holds that golden share.
Another question we got was about liquidators, for our company’s liquidation. Do they have to file a Beneficial Ownership Register down? The answer to that is yes. Who are the beneficial owners? Well, again, you’re going to, who owns greater than 25 per cent of the shares, and there’s control there as well because the owners won’t necessarily be a board of directors, it will be liquidators. The liquidator will potentially have to be put down as an RBO, as well, in the Register of Beneficial Owners.
You can see Beneficial Ownership Register, its a hot topic at the moment. There are a lot of queries that come in. We’re gonna deal with those queries in our webinar, Top Co Sec Issues in 2019, on the 9th of October.