On 3 February 2021, Act No. 37/2021 Coll., The Act on Beneficial Owners, was published in the Collection of Laws, which will enter into effect on 1 June 2021. This act responds to Directive 2018/843 of the European Parliament and of the Council of the EU (V. AML Directive) of 30 May 2018.
The aim of this act is to transpose into the national law some of the new requirements concerning beneficial owners, which are contained in the V. AML Directive.
This new legislation enshrines a more precise definition of the beneficial owner and stipulates that certain data which now do not have to be registered, will have to be newly entered in the register of beneficial owners. Juridical persons have to assess who is their beneficial owner by the new definition of beneficial owner and they have to adapt to this new legislative regulation. A business corporation that made an entry of beneficial owner pursuant to the Act on Public Registers of Juridical and Natural Persons within the time limit set by the Act, must ensure within 6 months since the entry into effective of this Act, i.e. till 1.12.2021, that all the data have to be in accordance with this Act, see Section 60 of this Act for more details. If the business corporation did not ensure the registration of any data about its own beneficial owner according to existing legislation, or did so after the stated deadline, the 6-month period does not apply for it and it has to register one´s own beneficial owner immediately after the new act enters into effect, i.e. after 1.6.2021.
The Act also newly enshrines the possibility to obtain data from the register of beneficial owners. It is important that the evidence is now public, so everyone will be able to look at this evidence and get some information about the beneficial owners of the company, i.e. particularly name, country of residence, year and month of birth, citizenship of the beneficial owner and information regarding the facts establishing the status of beneficial owner.
Newly, this Act introduces, as one of the possibilities of the registration of beneficial owners, the so-called automatic transcript of the beneficial owner from the commercial register or other evidences (e.g. evidence of trust funds).
Newly, this Act enshrines sanctions for violation of the obligation to register the beneficial owner. These sanctions include particularly prohibition to exercise voting rights at the general meeting (AGM) or prohibition to pay the interest of the profit, e.g. share in profits or dividends in case of a joint-stock company. This Act will also introduce sanctions for offenses, up to the extent of CZK 500,000.
In context of this Act, the Act on Public Procurement (No. 134/2016 Coll.) was amended.
We will provide more detailed information of individual changes in the following news.