Introduction

On 1 August 2021, a new law amending the Money Laundering Act came into force that may require action by your company or group. The German transparency register has been expanded to a full register and the so-called “reporting fictions” have been abolished.

The companies affected by the new law must report their beneficial owners to the transparency register for the first time by the end of the respective transitional period, as detailed below.

Abolition Of Reporting Fictions

Previously, there was no legal obligation to report the beneficial owners to the transparency register if the information on the beneficial owners could be obtained from public registers such as the commercial, partnership, or company register, or in case of listed companies (reporting fictions). As per the new law, reporting fictions do not apply.

Extended Reporting Obligations

All legal entities under private law and registered partnerships with registered office in Germany, including listed companies, are required to report their beneficial owners if they:

• Hold more than 25% of the capital shares,
• Control more than 25% of the voting rights, or
• Exercise control in a comparable manner.

Such legal entities must obtain, retain, keep up to date and transmit to the transparency register the following
information of their beneficial owners:

• First and last name,
• Date of birth,
• Place of residence,
• The nature and extent of the beneficial interest, and
• Nationality or, in case of multi-citizenship, all nationalities.

Associations domiciled abroad may also be required to disclose their beneficial owners to the German transparency register in course of real estate transactions (asset or share deal).

Transitional periods

Companies that were allowed to rely on a reporting fiction under the old law, must report their beneficial owners to the transparency register before the expiry of the following transitional periods:

31 March 2022: public limited company, Societas Europaea and partnership limited by shares (Kommanditgesellschaft auf Aktien);

30 June 2022: limited liability company, cooperative (Genossenschaft), cooparation (Partnerschaft); and

31 December 2022: other legal entities (e.g., registered partnership).

LPA Conclusion

The companies concerned must now take action to comply with the reporting obligations; violation of reporting obligations may be subject to heavy fines.

If you are unclear as to whether, or how this new law affects your business, LPA has a legal team on hand to answer your queries.