Danish beneficial owners must now be registered
Many Danish companies now have to register their beneficial owners with the Danish Central Business Register. As opposed to legal owners, beneficial owners can only be physical persons.
A consequence of the new Danish rules is that before 1 December 2017, a large number of companies must register the natural person(s) who ultimately own or control the company with the Central Business Register (CVR) of the Danish Business Authority.
Assessing who the beneficial owners of a legal entity are can be difficult. The threshold for when a physical person is considered a beneficial owner is approximately 25% ownership or control. However, this is only a presumption, and it is, therefore, necessary to include other factors than the share capital or the number of voting rights.
It is the company's duty to ensure the correct registration and therefore also to obtain and document the information necessary to assess both ownership and control.
The new rules implement the EU's fourth money laundering directive that aims to make corporate structures more transparent and prevent money laundering and financing of terrorism.
Who must register?
What must be registered?
The beneficial owner's name, nationality, place of residence and country of residence must be entered into the Central Business Register (CVR), including any CPR number.
Then, the nature and extent of the beneficial owner's rights must be stated/described, for example, that the person concerned has
- the right to appoint members of management,
- veto power,
- the right to approve payments of dividend or
- other rights that may be considered as controlling the company.
Finally, the date of the establishment of the person's beneficial ownership must be stated. If it is not possible to determine the date, the date of registration must be used.
If there are no beneficial owners, or if no beneficial owners can be identified, the registered members of the company's executive board will be designated as beneficial owners. The company should then keep documentation of the attempt to find the beneficial owner(s) for at least five years after the attempt.
It is the company's management who is responsible for registering information about beneficial owners, and the company is also required to check at least once a year whether the information is correct.
Do you need help assessing who the beneficial owners of your company are? Or do you need assistance with the registration? Our team of lawyers is ready to help. Just contact Ulrik Fleischer-Michaelsen, lawyer, by e-mail firstname.lastname@example.org or phone +45 77 40 10 33.