Back in 2016, the National Council of the Slovak Republic approved a new so-called anti-shell company law. Act No. 315/2016 Coll. on the Register of Public Sector Partners (hereinafter referred to as the "Act on the Register of Partners") came into effect together with the Act on Reminder Proceedings on February 1, 2017.
The primary purpose of this Act was to establish a register of public sector partners (hereinafter referred to as the "RPVS"), through which it is possible to determine who is the so-called final beneficiary of the entity registered in the RPVS. Entities that do business with the state, subcontractors of such entities, or entities that receive financial resources from the state in various forms, e.g., in the form of subsidies or European structural and investment funds, are registered in the RPVS. In simple terms, these are entities that come into contact with funds from public sources. The minimum amount of these funds is set by law at more than EUR 100,000 (one-off payment) or a total of more than EUR 250,000 in a calendar year (recurring payment). All entities that draw funds from public sources or apply for such funds must disclose their ownership structure through the RPVS down to the level of the ultimate beneficiary.
The Act on the Register of Partners as such does not contain a legal definition of the term "ultimate beneficiary", but Section 2(1)(c) refers to a specific regulation. This legal regulation is Act No. 297/2008 Coll. on the protection against the legalization of proceeds from criminal activity and on the protection against terrorist financing and on amendments to certain acts (hereinafter referred to as the "Act on the Legalization of Proceeds from Criminal Activity"). According to Section 6a(1), first sentence, before the semicolon, of the aforementioned Act, the ultimate beneficiary is any natural person who effectively controls or supervises a legal entity, a natural person who is an entrepreneur, or an association of assets, and any natural person for whose benefit these entities carry out their activities or business. In layman's terms, the ultimate beneficiary of a particular entity is a natural person who has a statutory share in the registered capital, profits or voting rights of that entity, or who otherwise controls that entity. It would be very difficult, if not impossible, to identify the ultimate beneficiary if the RPVS did not exist.
In 2018, another – in our opinion, fundamental – change is taking place in the field of determining the ultimate beneficiary. On February 1, 2018, Parliament approved a government bill amending the Act on the Legalization of Proceeds from Crime and certain other acts. The main objective of the proposed amendment is to transpose Directive 2015/849 of the European Parliament and of the Council of 20 May 2015 (hereinafter referred to as the "IV. AML Directive"). Among other things, this directive aims to prevent the use of the financial system for money laundering.
One of the amended laws is Act No. 530/2003 Coll. on the Commercial Register and on amendments to certain laws. A new paragraph 3 is inserted after § 2(2) (the current paragraphs 3 to 8 will be numbered 4 to 9 after the amendment comes into effect). The wording of the newly inserted paragraph is as follows:
"The Commercial Register shall also record, in the case of a legal entity that is not a public administration entity or an issuer of securities admitted to trading on a regulated market subject to disclosure requirements under a special regulation, equivalent legislation of a Member State of the European Union or equivalent international standards, the identification details of the ultimate beneficial owner shall also be entered, including their first name, surname, birth number or date of birth if no birth number has been assigned, permanent address or other address, nationality, type and number of identity document, and details establishing the status of the ultimate beneficial owner under a special regulation. The entry pursuant to the first sentence does not replace the obligation to enter the ultimate beneficiary of a public sector partner in the register pursuant to a special regulation.
In this provision, the term "ultimate beneficiary" is understood within the meaning of Section 6a of the Act on the Legalization of Proceeds from Criminal Activity, and the special regulation in the last sentence in fine refers to the Act on the Register of Partners.
In view of the new information to be entered in the commercial register, the rules for submitting an application for entry in the commercial register are also amended, with a new second sentence being inserted after the first sentence of Section 5(2) of the Commercial Register Act. The amended paragraph will read as follows:
"The application for registration shall be submitted on a form specified by a special regulation and must be accompanied by documents containing the information to be entered in the Commercial Register and documents containing the facts to be verified in accordance with this Act. Information on the ultimate beneficiary pursuant to Section 2(3) shall be provided on the form specified by a special regulation and shall not be supported by documents pursuant to the first sentence. If the applicant lists several objects of business or activities in the application for initial registration, it shall list the object of business or activity that it considers to be the main one in the first place.
Information on the ultimate beneficiary entered in the commercial register shall not be disclosed, thereby amending the provision of Section 10(5) of the Commercial Register Act, which deals with the non-disclosure of the birth number of a natural person as information entered in the commercial register.
It follows from the above that when legal entities are entered in the Commercial Register, additional information will be recorded, namely information on the ultimate beneficiary under the conditions and within the meaning of the cited provision and the Act on the Legalization of Proceeds from Criminal Activity. In practice, both registers – the commercial register and the RPVS – will operate in parallel, with both recording data on the ultimate beneficiary.
The explanatory memorandum to the amending act states that this amendment creates the conditions for the legal bridging of source registers and the register of legal entities, entrepreneurs and public authorities for the purpose of transparency of ownership of legal entities and the storage of information on the ultimate beneficial owner in a central register, as required by IV.
The amendment to the Act enters into force on March 15, 2018, but Article VII, which concerns the entry of data on the beneficial owner of legal entities in the Commercial Register, will not enter into force until November 1, 2018. Finally, it should be noted that legal entities listed in the amended Section 2(3) of the Commercial Register Act and entered in this register by October 31, 2018, are required to submit a request for the registration of data on the beneficial owner by the end of 2019.
In our opinion, it would be appropriate to link the two registers (the register of public sector partners and the commercial register) so that for entities already registered in the RPVS (and
for which the ultimate beneficial owner has already been identified), information on the ultimate beneficial owner would also be automatically transferred to the commercial register. This would not only reduce the administrative burden on the commercial register, but would also save costs for identifying and registering the final beneficiary, as registration in the RPVS would suffice.
