Transparency register & GmbH: Entry until 30.06. – fine threatens

GmbHs and UGs must correctly enter beneficial owners in the transparency register by June 30, 2022. Otherwise, those responsible will face heavy fines.

Read more about the transparency register and the registration deadline.

Transparency register & GmbH: High fines if registration is missing!

The transparency register has come to stay. Over the course of 2022, corporations such as the GmbH and partnerships such as the GmbH & Co. KG will be forced to report their beneficial owners in the transparency register. If persons to be registered are NOT entered by then, they will face heavy fines.

End of the grace period for the GmbH as of 30.06.2022

In principle, the comprehensive obligation to enter “beneficial owners” in the transparency register has already applied since 01.08.2021. However, the legislator has granted transitional periods which will now gradually expire in 2022. By the end of the relevant transition period at the latest, certain persons must now be entered in the transparency register. For

• GmbH
• UG
• Cooperatives and
• Partnership companies

the transition period already expires on June 30, 2022.

By this date at the latest, responsible parties must have actively ensured that the beneficial owners are entered in the transparency register. Failure to do so could result in severe fines! It is therefore high time to take action to avoid unpleasant and expensive consequences.

If you do not know whether you have to be entered in the transparency register as a “beneficial owner” or not: Contact us – we will support you in complying with your entry obligation in a timely and reliable manner!

The new transparency register

The transparency register has been in existence since October 2017 and – as the name suggests – is intended to ensure transparency as to who is personally behind companies with economic influence. However, the transparency register was initially only regarded as a “catch-all register”, i.e. only in certain exceptional cases was it necessary to enter the beneficial owners of companies.

However, on August 1, 2021, an amendment to the Anti-Money Laundering Act (AMLCA) introduced the “new” transparency register.

What is new is that the person responsible – including a limited liability company – must actively pursue entry in the register. Mere references to the fact that the relevant information can also be obtained from entries in the commercial register and the register of residents will no longer suffice in the future. It must now be actively indicated and entered who is the “beneficial owner(s)” of a GmbH, for example.

Who must be entered in the transparency register?

All “beneficial owners” within the meaning of the Money Laundering Act must be entered in the transparency register. Who this is is defined in § 3 GWG – even if this is often not easy to determine. Whether or not a natural person is the beneficial owner depends on various factors, e.g. whether he or she (un)indirectly

• holds more than 25 % of the capital shares or
• controls more than 25 % of the voting shares, or
• exercises control over the company in a comparable manner.

Important in this context:

1. If no beneficial owners are found according to this definition due to the shareholder structure, the legal representatives must be reported as so-called fictitious beneficial owners.
   
2. The 25% threshold can also be exceeded if you “indirectly” hold capital or voting shares. This may be the case, for example, if you hold an interest in a company via another company and exercise a controlling influence there.

Particularly in the case of complex shareholding structures in a GmbH, it is therefore important to check very carefully who must be registered in order to be able to make entries correctly. Even if you do not intentionally fail to make a necessary entry, this can lead to severe fines!

Are you unsure whether you need to be entered in the transparency register? Contact us promptly! We will check whether you are currently subject to the obligation to be entered in the Transparency Register and will also support you at very short notice in initiating the necessary entries. And, of course, we will also be happy to check on an ongoing basis whether you are subject to an obligation to register in the future, should your shareholdings change!

High fines threaten

If the obligation to register is not fulfilled (on time) or only incompletely, high to very high fines may be imposed. The legal basis for the fines can be found in § 56 GwG of the German Money Laundering Act (GwG) in conjunction with the corresponding applicable catalog of fines.

The obligation to register under the GWG, which is subject to a fine, is therefore by no means a “toothless tiger”. In the case of serious, repeated or systematic violations, the fines can easily reach amounts of several million euros. The amount of a fine then depends, among other things, on,

• whether the violation of the obligation to register was committed intentionally or negligently,
• whether the violation was serious, systematic or repeated,
• how high the balance sheet total of the company/enterprise is,
• what form of company it is.

How high is the risk of being “caught”?

But how high is the risk that a violation of the registration obligation will be discovered and prosecuted? Our lawyer Neele Schröder – focus in commercial and corporate law – assumes that the risk of being “caught” is relatively high:

“On the one hand, authorities must report violations of the registration obligation. In addition – and this risk should not be underestimated under any circumstances: competitors etc. can and will also report violations of the registration obligation! So there will simply be “blackening” with unpleasant consequences…”.