Monday 16 September 2019

New company ownership register hit by a raft of early filing errors

Worries: Deirdre Mooney raised the issue of requesting PPSNs from clients given concerns over data
Worries: Deirdre Mooney raised the issue of requesting PPSNs from clients given concerns over data
John Mulligan

John Mulligan

People using names in their Irish version instead of English, maiden instead of married names, and shortened versions of first names are just a few of the reasons why the Companies Registration Office says it has rejected submissions to the new Register of Beneficial Ownership (RBO).

The register, which gives precise details of the ownership of corporate entities and provident societies in Ireland, is being established as a result of the EU's fourth money-laundering directive, commonly known as MLD4.

Companies and societies have until November 22 to file their ownership data with the RBO or risk breaching the law.

The RBO does not have access to the personal details that are entered by filers in order to verify them.

Instead, the details are checked against information held by the Department of Employment Affairs and Social Protection. The details are not verified with the Revenue Commissioners.

The CRO said that based on the first two weeks of operation of the register, the common reasons for rejecting submissions also include: entering incorrect dates of birth or personal public service numbers; using a middle name in everyday usage, but not using the correct forename that's registered with the department; using variations of a name and mixing up details of multiple owners.

Failure to register beneficial owners can result in a fine of up to €500,000 on conviction on indictment. On summary conviction, a fine and/or a prison sentence of up to 12 months can be imposed.

The launch of the RBO was delayed during the summer, and establishing the register consumed a significant amount of resources within the CRO.

The Small Firms' Association had urged the CRO during the summer to postpone the launch of the register until November, but its introduction was already overdue at that stage.

One of the key requirements for the registration of beneficial ownership is the provision of Personal Public Service numbers (PPSNs).

Last year, the CRO said the supply of PPSNs was an "essential measure" to ensure the register's accuracy.

Any company director who owns more than 15pc of the shares in an Irish entity must have an Irish PPSN.

Additionally, any shareholder who receives dividends from an entity registered in Ireland must have a PPSN.

However, as many beneficial owners of Irish entities are outside the State, this has proved a challenge.

In June, Deirdre Mooney, the head of company secretarial at law firm William Fry, told the CRO that she had concerns about requesting PPSNs or passport numbers from her clients given the risks typically associated with data possession and retention.

The CRO has established a process where beneficial owners without a PPSN will soon be able to complete a declaration as to verification of identity, which in turn results in an RBO transaction number being issued. That number can then be used for registering beneficial ownership. The declaration that must be signed by people without a PPSN, must be witnessed by a notary public.

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