Obligation to notify the Transparency Register - Organisational effort, risk of fines and recommended solutions - KPMG Law supports you in ...
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Obligation to notify the Transparency Register – Organisational effort, risk of fines and recommended solutions KPMG Law supports you in checking beneficial ownership and, upon request, can then notify the Transparency Register January 2021
New: Negative control (also) triggers
obligation to notify the register
Considerable risk of fines – close monitoring
by the German Federal Office of
Administration
Planned: Discontinuation of „fictitious
notification“ brings with it the obligation
to notify
The challenge New: Negative control triggers obligation to notify Increased risk of consequences if Our service – your benefits
Legal persons under private law, registered the register reports are incorrect/not made Checking beneficial ownership
partnerships, trusts and comparable legal entities must The German Federal Office of Administration, which is This topic is particularly significant, as obliged entities – Preliminary examination to determine the beneficial
report information on beneficial ownership to the responsible for the Transparency Register, recently also under the German Anti-Money Laundering Act [GwG] owner, taking into account the specifics of certain
transparency register. In particular, the common legal defined „control in a comparable way“ as so-called are required to obtain and review an extract from the legal forms as well as the latest legal opinion of the
forms negative control. That means that if an individual Transparency Register in the course of identifying Federal Office of Administration
shareholder (perhaps at the level of the parent business partners. If they identify any deviations from – Advice and support in cases involving the negative
– limited liability company [GmbH] company) can block decisions made at the the information they have, they must file a discrepancy control
– limited partnership [GmbH & Co. KG] shareholders‘ meeting due to report.
– corporation limited by shares [Aktiengesellschaft] Notifying the Transparency Register
– his/her voting rights (requires a certain majority) In practice, banks and notaries in particular, as well as – Reporting the required information on the (fictitious)
are required to perform checks and take action. – veto rights industrial companies, file a considerable number of beneficial owners to the Transparency Register
– consensus requirements discrepancy reports due to inconsistencies or missing
Beneficial owner – who is affected? entries in the Transparency Register. Defence advice in administrative fine proceedings
A beneficial owner is anyone who he/she is also considered to be a beneficial owner, even
if his/her ownership interest/voting share is The discrepancy reports are checked by the Federal Well equipped to meet your needs
– controls more than 25% of ownership interest (significantly) below 25%. Office of Administration – and if errors or missing KPMG Law has been providing support in relation to
– controls more than 25% of the reports are identified, fines may be imposed. According the Transparency Register since it was introduced in
Draft bill: Removal of „fictitious notification“ to its catalogue of fines, the Federal Office of 2017 and has extensive professional expertise in
voting rights or planned Administration uses a rule of three factors to calculate determining beneficial ownership and defence advice in
To implement the rules under EU law, there are plans to a revenue-based fine: administrative fine proceedings.
– exercises control in a comparable way. convert the Transparency Register into a full register.
This means that, in future, reference to entries in the – Standard rate (EUR 100-500) Together with the Data & Analytics experts at KPMG
Particularly in the case of multi-level ownership commercial register will not exempt companies from – Factor I (1-2) mens rea AG Wirtschaftsprüfungsgesellschaft, we are also
structures, as well as in the case of a GmbH & Co. KG, the obligation to notify the Transparency Register. – Factor II (1-200) Revenue developing a simple and legally compliant technical
certain particularities may need to be considered in – Factor III (1-10) Severity of the breach solution. This cloud-based solution will make the
order to determine the beneficial owner. As a result, all companies would be required to report process for notifying the Transparency Register easy
their beneficial owners/fictitious beneficial owners. The If a GmbH with annual revenue of EUR 45 million and clear for you. You can set up and edit your data by
In addition, it should be checked whether voting rights current practical expedient would no longer apply, and breaches the reporting requirements through logging into the application, which is operated by
agreements, voting rights pools or comparable special would be replaced by a requirement to take action. negligence and this is assessed as a medium breach, KPMG. Queries and changes are assessed by us from a
rules, that deviate from the situation on paper, have this results in a fine of: legal perspective to facilitate easy and automated
been agreed between the shareholders. reporting.
EUR 500 × 1 × 45 × 3 = EUR 67,500
For further information or if you have any questions,
please get in touch.
2 Obligation to notify the Transparency Register – organisational effort, risks of fines and recommended solutions Obligation to notify the Transparency Register – organisational effort, risks of fines and recommended solutions 3
© 2021 KPMG AG Wirtschaftsprüfungsgesellschaft, a corporation under German law and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International © 2021 KPMG AG Wirtschaftsprüfungsgesellschaft, a corporation under German law and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International
Limited, a private English company limited by guarantee. All rights reserved. Limited, a private English company limited by guarantee. All rights reserved.
Contact Contact
KPMG Law KPMG AG
Rechtsanwaltsgesellschaft mbH Wirtschaftsprüfungsgesellschaft
Arndt Rodatz Björgvin Magnússon
Lawyer, Tax Advisor Head of Data Driven Services
Partner KPMG Lighthouse Germany
T +49 40 360994-5081 Partner
T +49 89 5997606-1042 T +49 174 321-8387
arodatz@kpmg-law.com BjoergvinMagnusson@kpmg.com
Dr. Heiko Hoffmann Ann-Sophie Sommer
Lawyer, Tax Advisor, Solicitor Consulting, Lighthouse Germany
(England & Wales) n.p. Senior Managerin
Partner T +49 69 9587-2748
T +49 89 5997606-1652 M +49 175 9395044
hhoffmann@kpmg-law.com AnnSophieSommer@kpmg.com
Christian Judis
Lawyer, AML Officer (TÜV)
Senior Manager
T +49 89 5997606-1028
T +49 69 95119-5060
cjudis@kpmg-law.com
Stephanie Haslinger
Lawyer
Senior Associate
T +49 89 5997606-1029
stephaniehaslinger@kpmg-law.com
www.kpmg-law.de
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offered to certain audit clients or where otherwise prohibited by law.
© 2021 KPMG AG Wirtschaftsprüfungsgesellschaft, a corporation under German law and a member firm of the KPMG global organisation of independent member firms
affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under
licence by the independent member firms of the KPMG global organisation.
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