The term “transparency” evokes different perceptions of reality depending on the context and interlocutors. On reading this article the word transparency reflects its dimension as well as the obligations of the companies. In order to increase transparency and fight financial criminal law offences, identification of beneficial owners of companies has become mandatory. It remains to be determined: for what? For whom ?
On November 22, 2022, the Court of Justice of the European Union invalidated the mechanism according to which information on beneficial owners of companies must be accessible to any member of the general public in all cases. He considered that this opening is a serious interference with respect to the Charter of Fundamental Rights of the European Union.
Bruno Le Maire, Minister of Economy, Finance and Industrial and Digital Sovereignty, has decided to keep the general public’s access to data from the Register of Beneficial Owners until all the consequences of the EU Court’s decision are implemented.
On the occasion of change in the National Business Register on 1er January 2023, access to data from the National Register of Beneficial Owners has been temporarily suspended for technical reasons. This access has been restored today from the site of the National Industrial Property Institute (INPI).
Thus, the future methods of access to the data of the Register of Beneficial Owners will soon be defined together with the stakeholders, taking into account the decision of the CJEU. In particular, they will allow press organs and civil society organizations with a legitimate interest to continue to access the register.
Beneficial owners represent natural persons who hold up to 25% of the share capital or voting rights. Their identification is necessary to access legal structures and prevent illegal practices.
In France, in 2017, a law related to transparency, the fight against corruption and the modernization of economic life, known as the Sapin II law, introduced this obligation. The measure aims to increase the confidence of the public, investors and officials in the integrity of companies.
Which companies are affected by the declaration of beneficial owners?
The declaration of beneficial owners is mandatory for all French companies. Thus, all commercial companies, civil companies and associations registered with RCS are concerned with this obligation. Further, this declaration should be attached with the application for registration of the company, i.e. before opening the company. In case of change, it is mandatory to update the beneficiaries. This should be done within one month of the amendment.
In addition, the declaration of beneficial owners must include information about the company (legal structure, corporate name, etc.). It should also identify the beneficial owners. It should also provide for the methods of control within the company.
5 principles to remember about transparency
- Whether market sectors have an obligation to maintain the virginity of the leader’s criminal record.
- It is a condition in case of approval or license
- This is a consideration for eligible associations in terms of collecting donations, sponsoring or issuing tax receipts.
- It is a strong belief for the stakeholders in the lasting relationship
- It is a necessity of survival in the field of competition mainly in the health, social, humanitarian, sports and cultural fields.
Multiple shades composed in three dimensions:
- I’corporate identity It is created on the basis of a culture, the origin of the members, the objectives set by it and the way it operates.
- Some companies set up a management committee or an executive committee to facilitate governance and oversee compliance with the line of conduct.
- Most financial documents are available and accessible.
- Some people will be more sensitive to reports of completed projects and others will prefer to know about upcoming projects.
- The level and quality of financial reporting varies depending on the size of the business and the origin of the resources.
- This is essential data today to answer Corporate Social Responsibility.
- It is a means of keeping an account of its actions and its mode of operation.
- It is also a technical necessity which makes it possible to refine the general orientation, effectiveness and efficiency of the works.
- It is a real management tool in the continuous improvement process.