Beneficial Ownership
Beneficial Ownership Act 2017
Background to the legislation
The Act repeals the Companies (Beneficial Ownership) Act 2012 and places all Isle of Man corporate and legal entities under the same legislation regarding beneficial ownership.
The Beneficial Ownership Act was given Royal Assent in April and the central database went live on 1 July 2017. Guidance issued by the Isle of Man Financial Services Authority was approved at the June sitting of Tynwald.
The Isle of Man prides itself of being responsive to international needs whilst maintaining a business-centric approach. The legislation was developed in line with the Isle of Man Government’s commitment, made to the United Kingdom last year, to enhance agreements for the sharing of information about the beneficial ownership of corporate and legal entities.
What is beneficial ownership?
Most people looking at a shareholder list on a company file will assume that the shareholder as the legal owner of the shares actually owns the shares recorded against their name and that they will be the person receiving any dividend or share of the profits. This is not always the case; sometimes the actual or beneficial owner will appoint a nominee to hold the shares in their name. This is entirely legal and may be simply a personal preference for not wanting others to be aware of the owner’s investment decisions.
In the Act, "beneficial owner" means the person who ultimately owns or controls a legal entity to which the Act applies, in whole or in part, through direct or indirect ownership or control of shares or voting rights or other ownership interest in that entity, or who exercises control via other means, and “beneficial ownership” is to be construed accordingly (whether or not this is the name recorded in the company's share register).
The Act defines any beneficial owner who owns or controls more than 25% of the beneficial ownership of a legal entity to which this Act applies as a “registrable beneficial owner” and the required details of any registrable beneficial owner must be submitted electronically to the Isle of Man Database of Beneficial Ownership by the nominated officer/CSP.
Requirement to have a nominated officer
The Act requires every legal entity (to which it applies) to appoint a 'nominated officer' unless the legal entity is in receipt of corporate services comprising Class 4 regulated activity provided by a CSP, who may undertake the role or responsibility for which a nominated officer is responsible (further information can be found in the Beneficial Ownership (Nominated Officer Exemption)(Class 4 Regulated Activity) Order 2017).
The nominated officer must be a natural person who is resident on the Isle of Man. The Act contains a saving provision that allows the nominated officer appointed under the repealed Beneficial Ownership Act 2012 to continue to be the nominated officer under the 2017 Act, subject to the company having written confirmation of the nominated officer’s consent to the continuation of their appointment.
There is a statutory obligation on the legal owners to provide the nominated officer with details of the beneficial owner of the shares if it is not them. There is also a duty on the beneficial owners and intermediate owners to assist the legal owner to ascertain the beneficial owner. Failure to meet these obligations is an offence under the Act.
The nominated officer needs to be told the name, usual residential address, a service address where it differs from the residential address, nationality, date of birth, date on which the interest in the legal entity was acquired and the nature and extent (expressed as a percentage) of the interest in the legal entity. The nominated officer must be notified of any changes to these details within one calendar month of the occurrence of the change.
Any changes to the Nominated Officer/CSP must be notified to Companies Registry within one calendar month of the occurrence of the change using the ‘Form NO/CSP’.
Duty of the Nominated Officer/CSP
The nominated officer/CSP must hold the “required details” for every beneficial owner of a legal entity to which the Act applies.
The required details are:
- Name
- Usual residential address
- A service address where it differs from the residential address
- Nationality
- Date of birth
- Date on which the interest in the legal entity was acquired
- The nature and extent (expressed as a percentage) of the interest in the legal entity
Where any beneficial owner holds more than 25% of the beneficial ownership of a legal entity to which this Act applies, that person is a registrable beneficial owner and the nominated officer must submit the required details of each registrable beneficial owner to the Department to be held in the Isle of Man Database of Beneficial Ownership.
How is the information to be submitted?
The Act states that the registrable beneficial ownership information must be submitted online, directly to the Isle of Man Database of Beneficial Ownership, by the nominated officer.
How do I access the Isle of Man database of Beneficial Ownership?
The Database will be accessed through Online Services and found in the Companies Registry section of www.gov.im. Companies Registry will issue an activation code by post to the nominated officer for each company for which they are appointed, this will enable the nominated officer to link the company to their Online Services account. CSP’s will be issued with a single activation code.
When does the information have to be submitted?
The nominated officer must submit the registrable beneficial ownership information by the date on which the legal entity’s next annual return must be filed or by 30 June 2018, whichever is earlier. Any changes to the information must then be submitted to the database within one calendar month of the nominated officer being made aware of the said changes.
Each time the nominated officer updates the information in the database they will be required to confirm that the information submitted is a true record of the required details of registrable beneficial ownership that has been provided to them as nominated officer.
If no changes occur during a year the nominated officer is still required to visit the Database at least once a year to confirm that the information held is both current and correct. A statement of compliance relating to this will also be contained in the annual return form.
What if there are no registrable beneficial owners?
The nominated officer is still required to visit the Database at least once a year (on the annual return date) and confirm that there are no registrable beneficial owners for the legal entity and that the information held is both current and correct. A statement of compliance relating to this will also be contained in the annual return form.
Oversight
The Isle of Man Financial Services Authority has oversight responsibilities to ensure the Act is complied with and the nominated officer or CSP comply with their obligations under the Act. Is it a criminal offence not to comply with the Act.
Guidance issued by the Isle of Man Financial Services Authority
Further Information
Our staff will willingly answer general queries about the role of the Nominated Officer/CSP by telephone or e-mail but cannot give legal advice. The telephone number for the Companies Registry is: +44 1624 689389 and the e-mail address is: companies@gov.im
If you require legal advice you should consult an Advocate.
Details of Isle of Man Advocates are available from the Isle of Man Law Society at:
Isle of Man Law Society
27 Hope Street
Douglas
Isle of Man, IM1 1AR
Telephone: +44 (0)1624 662910
Fax: +44 (0)1624 679232
E-mail: enquiries@iomlawsociety.co.im
Website: www.iomlawsociety.co.im
A copy of the Act and regulations are available free of charge from the Isle of Man legislation web site.
A list of corporate service providers is available on the website of the Isle of Man Financial Services Authority.
Documents may be submitted at any time during office hours (9am to 4.30pm Monday to Thursday and 9.15am to 4.30pm on Friday) ‘over the counter’ in the Companies Registry.
Submission of documents may also be effected by post or after office hours by way of the letterbox situated to the left of the main staff entrance in Hill Street. Presenters requiring acknowledgement of receipt of a document should provide a stamped self-addressed envelope.
The Companies Registry will remain closed on the first Wednesday of each month until 11am for staff training. Documents can still be left in the letterbox.
For the purpose of determining the date of submission of a document, documents submitted after 4.30pm on any working day (Day 1) but before 9am on the following working day (Day 2), will be treated as having been submitted on Day 1. For the avoidance of doubt, documents submitted before 9am on the day immediately following a weekend or Bank Holiday will be treated as having been submitted on the last working day prior to the weekend or Bank Holiday.
It is the responsibility of those presenting documents to ensure that documents arrive in the Companies Registry within the filing periods prescribed.
We are aware that post can on occasion be delayed. However presenters should be aware of that and post documents in plenty of time. The Companies Registry cannot operate a system which allows for such delays as to do so would simply amount to an extension to the filing periods set down by law.
Please note: The Department does not currently accept statutory documents by fax or e-mail.
The Exchange of Notes between the Government of the United Kingdom and the Government of the Isle of Man in respect of the sharing of beneficial ownership information is available
Beneficial Ownership (Nominated Officer Exemption)(CSP) Order 2017
Beneficial Ownership (Exemption)(Collective Investment Schemes) Order 2017
Beneficial Ownership Act 2017 Guidance June 2017 [GC No 2017/0003]
Recognised Stock Exchanges Beneficial Ownership Act 2017
