Beneficial ownership declaration forms: Guide for regulators and designers

Features of the example form

Structure: forms and subforms

In the example form, the declaration process has been divided into a main form (sheet) and subforms (sheets):

• COMPANY DECLARATION (main form);
• Legal ownership disclosure (subform);
• Publicly listed company disclosure (subform);
• Beneficial owner disclosure (subform);
• State ownership disclosure (subform).

A clear structure like this helps to organise information and guide people through the declaration process. In this example case, all entities that are required to declare who owns and controls them must fill in the main form. From that main form, they are directed to fill in subforms where relevant. They might need to fill in multiple copies of a subform (for instance, if more than one person qualifies as a beneficial owner).

Forms and their structure are highly dependent on regulatory requirements. If the latter are clear, then it will help with the organisation of information in the forms.

Sensitive information

There will be information collected about individual beneficial owners and other people which should not be published widely. Some private addresses, private contact details, and identification details may be disclosable but not widely shareable due to limits in the legal mandate for publishing or sharing data, or reasons of personal privacy or security. Declaration forms should make it clear what information is being collected for agency and state use only and will not be made public. In the example form, such information is highlighted with a yellow field with the message “This will not be made public”.

Legal ownership and chains

The concept of legal ownership is not the same as the concept of beneficial ownership, but they are related. Where BO of a registered private company is exercised indirectly (via intermediaries, including legal owners), OO advises that sufficient information about intermediaries should be collected to reveal full ownership/control chains.

In an ideal world, it would be sufficient to know the details of the legal owner(s) involved in the chain(s) of intermediaries (since the upward chain could be constructed by looking at the declarations of intermediaries). Currently, though, more information needs to be collected if full chains between companies and beneficial owners are to be revealed. The implication of this is that, as a minimum, either:

• declaration forms and systems should draw on information on legal ownership held elsewhere (for example, it may already be collected and held by a company registry); or
• information about legal ownership of the declaring company, where it relates to BO, should be collected.

And:

• information about other intermediaries should be collected, especially in the case where they are foreign registered entities.

Registered private companies are required to supply information about all legal owners. This includes, and is not limited to: other companies; people; any legally constituted organisations; and legal arrangements, such as trusts. The example form does not collect information about other intermediaries (unless they happen to be PLCs or SOEs).

If a form draws legal ownership information from another system, the declaration process may involve choosing or identifying the relevant legal owner(s) when describing an indirect BO interest. That is, when providing information about a beneficial owner who has an indirect interest in the company, the form-filler might be presented with a pre-populated list of the company’s legal owners. The form-filler would be expected to select the legal owner through which the indirect interest is exercised.

Types of interest in the declaring company

This form will collect details about how ownership or control is exerted by beneficial owners. Using BODS as a guide, the default list of interests that beneficial owners and others may hold in a firm are:

• shareholding;
• voting rights;
• appointment of board;
• other influence or control;
• senior managing official;
• rights to surplus assets on dissolution;
• rights to receive profits or income;
• rights granted by contract;
• conditional rights granted by contract.

There may be other types of interests that are relevant to the regulatory definitions adopted in one’s country. The enumeration and description of the particular interests relating to each case of BO are a key aspect of the form. The format is repeated for PLCs (sheet 4(d)), beneficial owners (sheet 4(e)), and state ownership (sheet 7).

Status of beneficial owner

Sheet “4(e) Beneficial Owner” is used to declare who the beneficial owners are of the declaring company, where applicable. The first section of the sheet acknowledges that in some disclosure regimes it may be possible that in some cases the identity of beneficial owners is not retrievable, or that a beneficial owner’s identity might be protected (anonymised) under special legal provisions.

The status of the beneficial owner can therefore be:

• known person;
• unknown person; or
• anonymous person.

Where the beneficial owner is known and information about them can be supplied, companies will select “known person”. The details of the person will then be supplied in the appropriate fields.

In some cases, the identity of the beneficial owner is not (yet) known to the person filling out the declaration. In those cases, the person filling out the form should choose the status “Unknown person” and provide more details about why the information is missing.

Where the beneficial owner has been identified, but under the legal framework information about them is not publishable, “anonymous person” should be selected. For example, there may be legal measures in place to protect beneficial owners’ identity where otherwise they would be at risk of violence or intimidation. In such a case, a beneficial owner may have applied to the government or relevant authority to have their details protected. This happens, for instance, in the UK (Section 790ZG of the Companies Act 2006).

There may be more precise terminology in national legislation, and in such cases these should be used in place of the general terms above. In practice, most beneficial owners should be known persons. The principle, however, is that it is better to highlight a gap in knowledge rather than not know the gap exists. This is an important aspect of reporting BO. It both reduces the opportunities for deliberately false reporting and supports the work of administrators and investigators.

Transliteration of names

There are fields on the example form for collecting a transliterated version of the declaring company’s name and of the beneficial owners’ names. This is of relevance even for jurisdictions with Latin alphabets as beneficial owners and parent companies may be based in countries that use alternative scripts. Providing or producing a version of a person’s or company’s name in an alternative character set can make the joining and comparison of datasets easier. However, ideally this should be tightly managed and verified by using a specified transliteration system. Otherwise, transliteration itself can become a loophole to be exploited by unscrupulous actors.

Fields for alternative names have not been provided for all intermediate companies (for the sake of brevity in the example form), but could be considered.

Nominees

Legal requirements around disclosing nominees and nominee shareholdings should be considered, as related to definitions of BO. This form assumes that nominees acting on behalf of a beneficial owner are not defined as beneficial owners themselves.

If a nominee is acting on behalf of a beneficial owner, some limited information about them should be collected. On sheet “4(e) Beneficial owner”, the name of the person or institution acting as a nominee can be entered. A further sub-form could be developed to collect additional information, such as country of residence/registration and identification number.

Attestation

To improve the reliability of the information submitted by the form, it includes a section called “Attestation” (8) at the bottom of the “COMPANY DECLARATION” sheet.

Some countries require that declarations are signed by a member of the senior management team or senior legal counsel. An attestation such as this prompts pre-submission checks by the company itself, as well as clarifying accountability for errors and omissions. It does not replace validation checks at the point of submission or post-submission verification measures. See OO’s Verification of beneficial ownership data policy briefing for more guidance.