Register of beneficial owners – reporting of beneficial owners by 11 December 2023

By Monday, 11 December 2023, corporations and legal persons governed by private law as well as so-called trusts must report their respective beneficial owner to the Companies Register for entry in the so-called register of beneficial owners. The obligation results from the implementation of the 4th and 5th EU Anti-Money Laundering Directives (EU Directives No. 2015/849 and No. 843/2018). The register is intended to facilitate the due diligence obligations of banks, insurance companies, notaries and other professionals, who are required under the aforementioned anti-money laundering provisions to verify the legitimacy of their customers and clients. The Ministerial Decree establishing that the register is also operational in Italy was published in the Official Gazette of 9 October 2023. From 10 October 2023, the legal entities subject to the obligation now have 60 days to report the data to the Companies Register, and the final deadline falls – on account of the public holidays – as mentioned on 11 December 2023. Below is an overview of the forthcoming obligation:

1. Undertakings subject to the reporting obligation

The obligation to report the beneficial owner concerns:

a) undertakings with legal personality, i.e. corporations (joint-stock companies, limited liability companies, partnerships limited by shares, cooperatives, mutual assistance companies, consortium companies); conversely: partnerships and sole traders are not affected;

b) legal persons governed by private law which are registered in the register kept by the Province or the Government Commissariat (recognised associations, foundations and the like) as well as

c) trusts which produce legal effects relevant for tax purposes, and similar arrangements; for this third group a special register will be set up at the Chamber of Commerce.

2. Identification of the beneficial owner

The beneficial owner is in principle the natural person or the natural persons who ultimately own, directly or indirectly, a company or entity or who exercise control over it. Depending on the legal form, different procedures are provided for determining the beneficial owner:

2.1 In the case of corporations, the beneficial owner is any natural person (or persons) who directly or indirectly holds more than 25% of the share capital, controls more than 25% of the voting rights or exercises control over the undertaking in a comparable manner (e.g. on the basis of contractual arrangements enabling significant influence and control). Specifically, this means the natural person (or the natural persons) who has at least one of the following characteristics:

• direct ownership of more than 25% of the share capital,
• indirect ownership of more than 25% of the share capital, where the ownership is held through subsidiaries, trust companies or through intermediaries.

If these conditions are not met, the beneficial owner is determined by taking into account the following requirements, in the order set out below:

• control over a majority or otherwise dominant number of votes in the ordinary shareholders' meeting,
• the existence of special contractual arrangements which enable significant influence to be exercised.

If an identification is not possible even on the basis of these criteria, the beneficial owner is the natural person (or natural persons) holding administrative or management powers.

Special rules apply, among other things, in the case of usufruct and co-ownership of shareholdings: - As is well known, the voting right belongs to the usufructuary, unless otherwise agreed with the bare owner. The other administrative rights attaching to the shares and interests belong to both. Accordingly, the guidance recommends reporting both the usufructuary and the bare owner where the shareholding amounts to more than 25% of the share capital.

• In the case of co-ownership with a dominant co-owner (e.g. co-ownership 40%/30%/30%), that co-owner must be reported; in the case of co-ownership with equally ranking owners (e.g. an interest held in undivided ownership by 3 siblings), all co-owners must be reported, always provided that the threshold of 25% is exceeded in total.

2.2 In the case of other legal persons governed by private law, on the other hand, the determination of the beneficial owner is based on the natural person (or the natural persons) who holds at least one of the following positions:

• founder, if still alive,
• beneficiary or
• holder of powers of representation, management and administration.

The founders, the beneficiaries and the holders of powers of representation, management and administration are deemed to be the beneficial owners of the legal person and must therefore be reported to the Companies Register. Conversely, according to Unioncamere, it is to be assumed that natural persons who merely hold the office of director but do not themselves have management powers and are neither founders nor beneficiaries of the legal person are not to be reported as beneficial owners.

2.3 In the case of trusts and similar legal arrangements, on the other hand, the beneficial owner is the natural person who holds one of the following roles:

• settlor,
• trustee,
• supervisory body,
• beneficiary or
• person who controls the trust or the assets transferred to the trust through direct or indirect ownership or in another manner.

3. Person subject to the reporting obligation

The reporting of the beneficial owner or owners must be carried out by the legal representative of the company (as a rule the chairman of the board of directors or the sole director) or of the legal person, under his or her own responsibility. This is a self-declaration which is subject to criminal sanctions in the event of a false or incomplete declaration.

4. Data to be reported

The information on the beneficial owner subject to the reporting obligation is essentially the following: first name and surname, date of birth, place of residence, nationality and tax number. In the case of companies, the company name, the registered office and the administrative seat, the PEC address, the size of the beneficial owner's shareholding or the form of control or of legal representation must be indicated.

5. Procedure for filing the report

The report itself must be prepared and transmitted only by electronic mail and with a digital signature, using form „TE“. For this purpose you need a „Telemaco“ account (a platform of the Chambers of Commerce), a digital signature, the software „Dire“ for the digital preparation and transmission of the aforementioned form (or another solution available on the market), which is made available free of charge by the web service of the Chambers of Commerce, and finally a certified e-mail address (PEC). The digital signature must be applied by the legal representative of the company personally, and delegation to a business consultant is not possible. The electronic preparation and transmission, on the other hand, may also be carried out by a tax adviser or another authorised person. The Chamber of Commerce of Bolzano has drawn up its own guidelines for completing the report, which we enclose with this circular.

Note: We ask you to check in good time that the legal representatives of the companies and entities subject to the reporting obligation have an active digital signature. We will gladly assist you in drawing up and subsequently transmitting the report.

The competent office is, incidentally, the Companies Register in whose catchment area the undertaking and the legal person governed by private law have their seat or where the trust was established. Only in the case of trusts (or similar arrangements) having their seat in Italy but established abroad is the Chamber of Commerce in Rome (clearing house) competent. In the case of fiduciary mandates, the competent province is the one in which the trust company to which the mandate relates has its seat.

No stamp duty is payable for the reporting of the beneficial owner. The secretarial fees are, however, payable and amount, pursuant to the Ministerial Decree of 20 April 2023, to 30 €. It should be recalled that payment of the secretarial fees is a precondition for the admissibility of the application

As mentioned above, the report is in principle made as a self-declaration, and no documents evidencing beneficial ownership have to be filed. This documentation must, however, be carefully retained by the directors so that they can submit it to the offices of the Companies Register on request.

6. Deadline for the first report and subsequent changes

As indicated at the outset, the final deadline for the first report is Monday, 11 December 2023.

Undertakings established after 6 October 2023 must comply with the obligation within 30 days of their entry in the relevant registers or, in the case of trusts and similar legal arrangements, of their establishment.

Upon any future change of the beneficial owner (for example as a result of the entry of a new shareholder with a holding in the share capital of more than 25%; upon the appointment of a new director of a legal person governed by private law; a change in the beneficiaries of the trust, etc.), a new electronic form TE must be transmitted to the office of the competent Companies Register. In the event of a change of the beneficial owner, the deadline for filing the updated report is 30 days from the date of the deed. Where the deed giving rise to the change has to be published and the so-called entry with constitutive or partly constitutive effect is provided for, the period of 30 days runs from the date on which the entry in the register was made.

Irrespective of any change, the aforementioned companies, legal persons governed by private law as well as trusts and similar arrangements must report their beneficial owners periodically, even if no changes have occurred compared with the previous report. The report must be made within 12 months of the last report. Undertakings may also make the report at the same time as the annual filing of the financial statements with the competent Companies Register, subject to compliance with the maximum period of twelve months from the last report.

7. Penalties

Failure to report the beneficial owner within the deadlines indicated is punishable by an administrative penalty of between 103 euro and 1,032 euro, whereby it is reduced to one third if the report is made within 30 days of the expiry of the original deadline.

8. Inspection

The register of beneficial owners kept by the Companies Register is in principle public and also entitles third parties (against payment of a corresponding fee) to inspect it. Where the beneficial owner can cite serious grounds (fear of kidnapping, extortion, etc.), it is, however, also possible to restrict inspection by third parties. How such circumstances are to be substantiated will certainly be clarified in the coming weeks.

Note: We recommend making full use of the possibilities afforded here by law.

Enclosures: Guidelines of the Chamber of Commerce of Bolzano for completing the reporting form