Does the amendment to the Czech Ultimate Beneficial Owners Act apply to your company as well?

The Parliament has adopted an amendment to the Czech Ultimate Beneficial Owners Act (“UBOs Act”) in the summer, which amendment will come into force on 1 October 2022. The legislators are thus reacting to the inaccurate and insufficient transposition of the EU directive, which has been criticised in the current UBOs Act. What impact will this amendment have for Czech companies and what changes does it bring?

The law had to be amended primarily because the current definition of beneficial owner and the scope of exemptions for entities who are currently not obliged to register their UBOs, do not comply with European regulations according to the European Commission. 

The most significant change of the amendment will be the abolition of the current internal division of the beneficial owner into two categories – the ultimate beneficiary and the person with final influence. Instead, a single material characteristic of the beneficial owner who “owns or controls” the legal person will be introduced, whereas the law provides legal fictions pursuant to which the UBO may be determined. As a consequence, once the amendment to the UBOs Act becomes effective, the range of ultimate beneficial owners of a specific company may be wider as compared to the range determined under the current regulation.

According to the explanatory memorandum to the amendment, business corporations will have to re-assess who is their beneficial owner under the new statutory definition. Companies which already have their UBOs properly registered in accordance with the current UBOs Act will have to secure that their entry in the UBOs registry is in compliance with the new law no later than within 6 months of the effectiveness of the amendment (i.e. by 1 April 2023). 

Another major change is a more extensive list of persons who will be required to register. Previously, political movements, churches and employers’ organisations, for example, were exempt. In most of these cases, the data in respect of such entities’ UBOs should then be automatically transcript into the register. For those entities whose data is not automatically transferred, the first registration will be exempt from the administrative fee.

Finally, the amendment also expands the possibilities of remote access to the register of beneficial owners. The change is aimed primarily at grant providers who will thus be able to obtain data without the cooperation of applicants. Applicants will therefore not have to share the excerpts from the UBOs registry with the grant providers. Secondly, the remote access shall be made available to the Council for Radio and Television Broadcasting, which shall help enable the exercise its authority.

By Konečná & Zacha law firm, Lithuania, a Transatlantic Law International Affiliated Firm.  

For further information or for any assistance please contact centraleurope@transatlanticlaw.com

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