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Statement regarding the ultimate beneficiary – eliminated for certain companies

The statement regarding the ultimate beneficiary, which the majority of the Romanian companies registered in the Romanian Trade Register have the obligation to submit, could be repealed for certain categories of companies starting this year already.

Specifically, according to a draft law that was recently voted by the Romanian Parliament, this declaration will no longer have to be submitted by companies in which there are only individual shareholders (no legal entities registered as shareholders). Therefore, if there are no other real beneficiaries behind those individuals, says the draft bill, the obligation to submit the ultimate beneficiary statement no longer applies.

This statement for the identification of the real beneficiaries is currently mandatory according to the anti-money laundering legislation for all Romanian legal entities – companies, but also for associations and foundations.

According to the draft law voted by the Chamber of Deputies on 10 June 2020, in the case of companies where shareholders are consisting only of natural persons, for completing the register of real beneficiaries, the Romanian Trade Register will have to use the documentation already submitted for registration of the companies. The submission of the statement regarding the ultimate beneficiary will only remain necessary if there are changes to the identification data of the beneficial owner. In this case, the declaration shall be submitted within 15 days of the change.

This means that the obligation to submit this statement will be repealed also for companies already incorporated. Therefore, there are high chances that many of us will already get rid of this obligation starting this year, for which the deadline was recently postponed to November 1, 2020 for the second time by the government.

Why will the statement regarding the ultimate beneficiary be repealed?

According to data analyzed by the Romanian Trade Register and to the statements of those who initiated the draft bill, the submission of the statement regarding the ultimate beneficiary in the case of companies established only by individual shareholders does not bring any new information to the Registers. Specifically, these declarations contain information that the Registers in question (the Trade Register, the Register within the Ministry of Justice and the one within the Romanian Tax Office – ANAF) already had available since the incorporation of the companies.

Also, according to data provided by the Romanian Trade Register, it appears that, out of the 978,245 limited liability companies active at the level of the Register, only 3.7% have legal entities as shareholders. However, the law also stipulates the obligation to submit the ultimate beneficiaries statements for the remaining 96.3%. For the latter however, this obligation is not justified since the registers have all the information necessary to identify the real beneficiaries of the money in those companies.

Thus, the obligation to submit this declaration is still an unjustified bureaucratic and economic burden for the Romanian companies. Under the given conditions, its repeal from the law is more than welcome.

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