In accordance to Section 93A of the Companies Act, 2015 every company is required to keep a register of the beneficial owners of the company. A beneficial owner is defined as a person with the ultimate ownership and control of the legal person or arrangement or the natural person on whose behalf a transaction is conducted. Also include persons who exercise ultimate effective control over a legal person or arrangement.
A beneficial owner of a business is therefore a natural person who meets any of the following conditions in relation to a company:
- Holds at least ten percent of the issued shares either directly or indirectly.
- Exercise at least ten percent of the voting rights in the company either directly or indirectly.
- Holds a right, either directly or indirectly, to appoint or remove the director of the company.
- Exercises significant control directly or indirectly on the company.
A company is expected to take reasonable steps in identification of its beneficial owners, the following details in relation to the beneficial owners of the company must be entered in the register;
- The full name
- The birth certificate number, the ID number or the passport number
- Personal identification number
- Nationality and Date of birth
- Postal address, Business address and Personal address
- Telephone number and the email address of the beneficial owner.
- Occupation or Profession
- Nature of ownership or control
- The date on which the individual became the beneficial owner.
- The date on which the person ceased being a beneficial owner.
- Any other detail that the Registrar will require from time to time.
A company shall lodge with the Registrar a copy of the register of beneficial owners in Form BOF1 as set out in the first schedule in accordance with section 93 (3) of the Companies Act, 2015. When an individual ceases to be a beneficial owner, the company shall file a notice to the Registrar in Form BOF2 in accordance with section 93 (4) of the Companies Act, 2015 and pay the prescribed fee.
In a situation where a company knows or has reasonable cause to believe that an individual is a beneficial owner, the company shall give notice to the individual requesting them to provide the material information required from a beneficial owner. If the individual fails to provide the material information required within 21 days of issuance of the notice, the company shall issue a warning notice to the individual and keep a copy of the warning letter in the company’s register of beneficial owners.
A company shall restrict the interest of an individual in the company, if the individual has not complied with the warning notice within 14 days of the date of the warning notice. The company shall file a copy of the restriction issued with the Registrar within 14 days from the date of the issuance of the restriction and give notice in writing to the affected individual informing them of the restrictions affecting them. When an individual complies with the warning notice after a stipulated period of time, the company shall, within 14 days of compliance to the notice remove restriction placed on the relevant interest of the beneficial owner.