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Requirement On Disclosure Of Company’s Beneficial Ownership Information To Take Effect

CM Advocates - Nigeria > Corporate Law  > Requirement On Disclosure Of Company’s Beneficial Ownership Information To Take Effect

Requirement On Disclosure Of Company’s Beneficial Ownership Information To Take Effect

An amendment to the Companies Act 2015 (the “Act”) by the Statute Law (Miscellaneous Amendment) Act 2019 introduced a new section 93A to the Act that required each company to have and maintain a register of its beneficial owner(s). The information to be contained in a company’s register of beneficial owners was to be prescribed by regulations to be made under the Act. [For more on the amendment see our alert “Amendments to the Companies Act 2015”]

The Attorney-General has now published the Companies (Beneficial Ownership Information) Regulations, 2020 (the “Regulations”) which prescribe the information to be maintained in the register of beneficial owners.

The effect of the Regulations is that where shares in a company are held under a trust or nominee shareholding, the company will be required to disclose the identity of the ultimate beneficial owner of the shares. This will have the effect of removing the anonymity that shareholder enjoyed where share are held in trust or nominee.

Under the Regulations, a “Beneficial Owner” means the natural person who ultimately owns or controls a legal person or the natural person on whose behalf a transaction is conducted, and includes those persons who exercise ultimate effective control over the legal person. A person will be considered to be a beneficial owner, and therefore included in the register, if he/she meets any of the following conditions:

  • holds at least 10% of the issued shares of the company;
  • exercises at least 10% of the voting rights in the company;
  • holds a right of appoint or remove a director of the company; and
  • exercises significant influence or control over the company.

The obligations of a company under the Regulations are:

  1. to take steps to identify its beneficial owners and enter in its register of members their particulars as set out in the Regulations.
  2. to lodge with the Registrar of Companies the register of beneficial owners, any changes to the particulars and a notice of any person who ceasing to be a beneficial owners, in the prescribed form;
  3. to give notice to a person it knows or has reasonable cause to believe that the person is a  beneficial owner, requiring the person to provide the required particulars within twenty-one (21) days from the date of the notice;
  4. to give a warning notice to a person who fails to comply with the notice to provide his particulars;
  5. to restrict the relevant interest of a person who fails to comply with the warning notice within fourteen (14) days and notify the person affected by the warning notice and file the warning with the Registrar of Companies.

It is an offence to disclose the beneficial owners’ information for any purpose other than for which the information was obtained and the office is punishable by a fine not exceeding KShs. 20,000 or imprisonment for a period not exceeding 6 months or to both.

How we can assist

CM Advocates has a fully-fledged company secretarial and corporate governance advisory business unit that offers a vast range of company and corporate law advisory services. Our highly qualifies and experienced personnel will assist with your company law matters and ensure that your company is compliant with the laws and regulations.

We shall be pleased to assist your company comply with the requirements of the Regulations by preparation and maintaining the Beneficial Owners Register as well the identifying and giving notice to the beneficial owners to provide the particulars required by the Regulations.

Kindly get in touch with us for further assistance on the above.