In a nutshell:  since the imple­men­tation of the Fourth EU Money Laundering Directive in June 2017, the Trans­pa­rency Register has been maintained in Germany as an electronic register. This Register is intended to help combat money laundering and the financing of terrorism.

The register contains entries on the beneficial owners i.e. the natural persons who ultim­ately own or control an entity. Due to the conversion into an “independent register”, companies that were previously not subject to the reporting requi­re­ments must now also check whether they are obliged to report infor­mation on the beneficial owners, if necessary also so-called ficti­tious beneficial owners. Depending on the type of entity, there are transi­tional periods for subse­quent notifi­ca­tions; viola­tions can be punished as adminis­trative offences with fines.

The regula­tions appli­cable to the Trans­pa­rency Register are set out in the sections 18 et seq. AMLA (Act on the Tracing of Profits from Serious Crimes – Anti Money Laundering Act – Geldwä­sche­gesetz). Initially the Trans­pa­rency Register operated as a “dependent register”, i.e. for infor­mation available in other public registers (such as the commercial register) no independent reporting obliga­tions to the Trans­pa­rency Register existed. The register then converted to an “independent register” in August 2021 as a result of which all legal entities became subject to trans­pa­rency requi­re­ments (including regis­tered partner­ships) and are therefore obliged to report on their beneficial ownership. As such, those companies that were previously not subject to these requi­re­ments must now check the scope of their reporting obligations.

For the purposes of the AMLA, the repor­table beneficial owner of an entity is any natural person:

1. who owns more than 25% of the capital shares,
2. who controls more than 25% of the voting rights, or
3. who exercises control in a compa­rable manner.

The required infor­mation to be reported on the beneficial owner includes:

• first and last name,
• date of birth,
• place of residence, and
• nature and extent of the economic interest.

The manner in which the individual meets the threshold of a beneficial owner must be recog­nisable from the infor­mation provided, i.e. whether this is based, for example, on the amount of share capital or voting rights or on an agreement with third parties or other shareholders.

If no natural person can be identified as the beneficial owner, the legal repre­sen­tative or the managing partner is deemed to be the beneficial owner and must be reported as the “ficti­tious” beneficial owner(s) for entry in the Trans­pa­rency Register.

Companies estab­lished after 31 July 2021 must report their data to the Trans­pa­rency Register without delay. Transi­tional periods apply to companies that have only become subject to reporting requi­re­ments as a result of the amendment to the law. For these companies, the reports which were previously not required must be completed and filed. While the reporting deadline for stock corpo­ra­tions (AG), European Companies (SE) and partner­ships limited by shares (KGaA) has already expired on 31 March 2022, companies in the legal form of a limited liability company (GmbH), regis­tered coope­rative (einge­tragene Genos­sen­schaft), European coope­rative (Europäische Genos­sen­schaft) and partnership (Partner­schafts­ge­sell­schaft) must report their data to the Trans­pa­rency Register by 30 June 2022. Limited partner­ships (KG), general partner­ships (Offene Handels­ge­sell­schaften), founda­tions (Stiftungen) and all other companies have a slightly later deadline of 31 December 2022.

Simple viola­tions of the reporting and notifi­cation requi­re­ments can be punished by a fine of up to Euro 100,000. Serious, repeated or systemic viola­tions may result in fines in the amount of up to several million Euro.

Inter­action with the Trans­pa­rency Register can only be made electro­ni­cally by setting up a user account and after receiving a customer number all functions of the Trans­pa­rency Register are available. People with powers of repre­sen­tation (including lawyers in the context of an attorney-client relati­onship) can, for example, enter details for beneficial owners or submit requests for inspection of the Trans­pa­rency Register. Obligated persons (as defined in the AMLA) are entitled to do this if the inspection is carried out to fulfil their own due diligence obliga­tions. Obligated persons must also submit a decla­ration of discrepancy if they become aware of differing data on beneficial owners.

The expansion of the Trans­pa­rency Register and the abolition of the previous “fiction of notifi­cation” leads to signi­fi­cantly increased infor­mation being available on the Trans­pa­rency Register, but also means an increased requi­rement for attention from companies. In addition to the required additional notifi­cation obliga­tions, it should be noted that every change in personnel on the board of directors, management, or in the personal data which is subject to regis­tration, must be reported not only to the commercial register, but also to the Trans­pa­rency Register.

Should you have any further questions, please do not hesitate to contact your regular contact person at EHLERMANN RINDFLEISCH GADOW or Dr. Carolin Schmeding or Dr. Hauke Rittscher.