The legal regime applicable to the Effective Beneficiary and the deadlines for 2019

The Legal Regime of the Central Register of the Effective Beneficiary was a topic that started in 2017 and continued on the agenda in 2018. The law that approved this regime was published in 2017 and still lacked regulation. Such regulation was published (almost) unnoticed (only) in August 2018.

These are all consequences of the European Union’s impositions in the context of preventing the use of the financial system for money laundering or to finance terrorism.

In general terms, the idea is that the individuals who own the companies (or other entities identified in the aforementioned law), even if indirectly, or under their effective control, are duly identified and that they register that identification online, on the Ministry of Justice portal created for this purpose.

As a guideline for indicators of “effective control” of the entity, on the portal, the following examples are pointed out: “Owning 25% of the share capital, directly (ownership) or indirectly (voting rights); Special rights that allow controlling the entity; In special cases, the top management (manager, administrator, director, etc.).”

Now, in practical terms, it is important to pay attention to the obligations arising from that regulation. In summary, the deadlines for the declaration on the beneficial owners of entities that were constituted until October 1, 2018 are as follows: entities subject to commercial registration, have until April 30, 2019 and other entities until April 30, June 2019. This phase starts on January 1st, 2019. It is not advisable to leave everything until the last day of the deadline, as is the prerogative of many entities.

For companies that have been and are being incorporated since October 1st, 2018, the deadline for submitting this declaration is 30 days and is already in force.

Fulfillment of this duty has no associated cost. However, failure to comply with the legally established deadlines constitutes an administrative offence liability.

But beware: this regime does not apply only to companies. It also applies to other types of legal persons. It is necessary to be informed. Also at stake are associations, foundations, business entities, civil societies, cooperatives, funds or trusts, for example.

Therefore, it is necessary to pay attention to the deadlines so as not to end 2019 with unnecessary costs.

Sara Clode Lobo, Lawyer