The Beneficial Ownership of Legal Persons (Guernsey) Law, 2017 (Law) came into force on 15 August 2017 and should be read with the Beneficial Ownership (Definition) Regulations, 2017 (Regulations). From 15 August 2017 all companies, foundations and limited liability partnerships (legal persons) have to provide beneficial ownership information at the time of establishment. All existing legal persons will have to comply with the Law within a given period of time. For foundations and limited liability partnerships compliance is required by 31 October 2017 and for companies compliance is required by 28 February 2018. This latter period is to coincide with the submission of the annual validation which has to be completed by the end of February.
Who is a beneficial owner?
There is a three-tiered approach for determining who is a beneficial owner. The starting point for beneficial ownership in relation to a legal person is: who owns that legal person? A natural person, a beneficial corporate entity or a trust may all “own” a legal person. A beneficial corporate owner is either itself a Guernsey entity or a company listed on a recognised stock exchange. Details of the second and third tiers will follow later in this article.
What constitutes beneficial ownership?
In relation to a company, owners are all persons who hold, directly or indirectly:
More than 25% of the company’s shares;
More than 25% of the voting rights of the company; or
The right to appoint or remove a majority of the board of directors.
In relation to a foundation, owners are persons that:
Hold, directly or indirectly, more than 25% of the voting rights in the conduct and management of the foundation;
Hold the right, indirectly or directly, to appoint or remove a majority of the officials of the foundation;
Are beneficiaries with a vested interest;
Are default beneficiaries upon termination; or
Have a future entitlement to a substantial benefit from the foundation.
In relation to an LLP, owners are all who hold, directly or indirectly, more than 25% of the voting rights in the conduct and management of the LLP.