Klaudia Kamińska-Kiempa

Attorney at law (Poland), LL.M.
Phone: +48 12 378 66 17

Companies have a new obligation since 13 October 2019 to report beneficial owners to the Central Register of Beneficial Owners (Act on Counteracting Money Laundering and Terrorist Financing). Companies formed after that date will be obliged to report their beneficial owners within 7 days of incorporation (official entry in the National Court Register). Companies already existing have to do it by 1 April 2020.

Financial institutions are obliged to identify and check the identity of beneficial owners of their clients as part of their financial security measures even before they establish business relations with them (according to the Act on Counteracting Money Laundering and Terrorist Financing).

The Central Register of Beneficial Owners is meant to help the obliged institutions fulfil those obligations as commercial companies (except public ones) will be obliged to disclose their beneficial owners in that register. The register will be open, free and available to general public. Data in the register will be presumed to be true and the reporting person (or the entity authorised to represent a company) will generally be liable for damage caused by reporting untrue information or reporting it past the deadline. Moreover, the reporting person may face criminal liability for perjury. Therefore, it is important to correctly identify the beneficial owner of your company, which may prove challenging in intricate corporate structures.

Who is a beneficial owner

According to the statute, the beneficial owner is always a natural person or natural persons who directly or indirectly control the company through their rights. Those rights result from legal or factual circumstances and enable that person(s) to exert decisive influence on the activities or actions undertaken by the client or one or more natural persons on behalf of whom business relations are established or an occasional transaction is performed. Here are examples of those rights:

  • if the client is a legal entity other than a company whose securities are admitted to trading on the regulated market subject to the disclosure requirements under EU laws or equivalent laws of a third country:
    • being a natural person who is the client's shareholder and holds, as owner, over 25% of the total shares in that legal entity;
    • being a natural person holding over 25% of the total voting rights in the client's decision-making body, also as a pledgee or usufructuary or under agreements with other persons entitled to vote;
    • being a natural person controlling the client by virtue of the holding rights referred to in Article 3(1)(37) of the Polish Accounting Act of 29 September 1994 (Journal of Laws of 2019, item 351); or
    • being a natural person being a senior executive, if it has been documented that the identity of the natural persons referred to in indents 1, 2, 3 and 4 cannot be established or is uncertain and there are no suspicions of money laundering or terrorism financing;
  • in the case of a client being a trust:
    • the founder;
    • the trustee;
    • the supervisor (if appointed);
    • the beneficiary;
    • another person controlling the trust;
  • if the client is a natural person carrying on a business activity and no conditions or circumstances have been identified in respect of the client that could suggest that he is controlled by one or more natural persons, it is assumed that such a client is at the same time a beneficial owner.

Problems with identifying the beneficial owner

In commercial companies, the beneficial owner would have to be identified by scrutinising the ownership structure. Also the information about shareholders disclosed in the National Court Register, the articles of association, financial statements, the organisational chart and other details from credible sources may prove helpful. However, it will happen that despite the best effort the beneficial owner cannot be identified. This is most likely in joint-stock companies and partnerships limited by shares with many shareholders who are not registrable. Identification of the beneficial owner may also prove complicated in companies with foreign capital as it would require examination of registry documents of companies entered in foreign registers which are not always publicly open or do not contain information about shareholders. 

If you document that you cannot identify the beneficial owner, the manager in the company, e.g. a management board member, will be regarded as the beneficial owner. Still, be mindful that this should be an exceptional situation and only if the beneficial owner(s) cannot be identified because e.g. the shareholders are scattered, which however should be carefully recorded in the internal documents of the organisation. No doubt, classifying a manager as a beneficial owner should not be used as an easy alternative where the beneficial owner is difficult to identify. The statute says that this difficulty must be documented which means that the company must have documents showing that the beneficial owner cannot be identified. Therefore, the exception to the rule cannot be used as an excuse by companies which do not want to make an effort to identify their beneficial owner.

In you have any questions or doubts about the register and identification of beneficial owner, Rödl & Partner's experts Cracow, Gdansk, Gliwice, Poznan, Warsaw and Wroclaw will be glad to help you.

Klaudia Kamińska-Kiempa