The obligation for French companies to file information regarding their beneficial owner with the Companies' Registry is governed by:
- the order n°2016-1635 of 1 December 2016 and the law n°2016-1691 of 9 December 2016 (known as the "loi Sapin II"), that are codified in articles L.561-2-1 to L.561-50 of the French Monetary and Financial Code ("MFC");
- the decree n°2017-1094 of 12 June 2017 (the "Decree") codified in articles R.561-55 to R.561-63 of the MFC;
- article L. 123-6 of the MFC.
I. Definition of beneficial owner
According to article R.561-1 of the MFC, a "beneficial owner" refers to the natural person(s) who (i) either hold(s), directly or indirectly, more than 25 % of the share capital or voting rights of the company, or (ii) exercise(s), by any means, a power of control over the management, administrative or executive bodies or over the shareholders' meetings of the company.
II. Entities to which the obligation applies
The requirement to provide and keep information related to the beneficial owners applies to companies, economic interest groups (groupements d'intérêt économique) and other legal entities that must be registered with the Companies' Registry.
In fact, according to articles L.123-1 and L.561-46 of the MFC, companies and legal entities subject to this obligation are :
- companies and economic interest groups having their registered office in a French territory and having the legal capacity;
- commercial companies having their registered office located outside of a French territory and having a branch in one of those territories; and
- other legal entities that have to be registered according to legislative and regulatory provisions.
III. Deadlines to comply with the filing obligation
With regards to the deadlines for filing the information on the beneficial owner(s), a distinction is made between companies registered before and after 1 August 2017.
a. Deadlines applicable to companies registered after 1 August 2017
For companies registered after 1 August 2017, the article R. 561-55 of the MFC states that the document relating to the beneficial owner's identity must be filed with the Companies' Registry of the Commercial Court (greffe du tribunal de commerce):
- when the registration application of the company is filed with the Companies' Registry; or
- at the latest, within fifteen (15) days as from the receipt of the certificate proving that the company's registration application has been filed.
Additionally, any updates in respect of the beneficial ownership must be filed with the Companies' Registry of the Commercial Court (greffe du tribunal de commerce) within thirty (30) days as from the occurrence of any fact or act requiring any modification of or addition to the information already provided.
b. Deadlines applicable to companies registered before 1 August 2017
Pursuant to the article 5 of the Decree, companies registered before 1 August 2017 must file the beneficial owner's information no later than 1 April 2018.
IV. Form and content of the document relating to the beneficial owner
Pursuant to article L.561-56 of the MFC, the document relating to the company's beneficial owner shall:
- be dated and signed by the company's legal representative or the legal entity filing the information;
- include the following information
about the company or the legal entity:
- name or business name;
- legal form;
- address of the registered office; and
- where appropriate, its identification number completed by the mention "RCS" followed by the name of the city where its Companies' Registry is located;
- include the following information
relating to the beneficial owner:
- names, used name, aliases, first names, date and place of birth, nationality, personal address of the natural person(s);
- form of control over the company or the legal entity; and
- date on which the natural person(s) became beneficial owner(s) of the company or the legal entity.
Pursuant to article L.561-48 of the MFC, if the company has failed to file the document relating to its beneficial owner's identity, the president of the Court may, immediately or following a request from the public prosecutor or from any person having a legitimate interest, order the company to file this document, and if necessary, subject the company to a penalty.
Pursuant to article L.561-62 of the MFC, the president of the Court will issue an order in which he provides a time limit for filing the document, and where appropriate, a penalty rate.
VI. Disclosure of the document identifying the beneficial owner
Pursuant to article L.561-46 of the MFC, the document relating to the beneficial owner may be communicated only to:
- the company or the legal entity that has filed the document;
- without restriction, the following competent authorities, within the scope of their mission:
- the judicial authorities;
- the national financial intelligence unit;
- the customs officials acting within the powers conferred by the French Customs Code;
- the authorized agents of the public finance administration responsible for tax control and recovery in tax matters ;
- the supervisory authorities mentioned at article L.561-36 of the MFC;
- persons subject to the legislation and regulation on anti-money laundering and counter terrorism financing; and
- any other person having a legitimate interest and duly authorized by the judge in charge of monitoring the Companies' Registry in which the company or the legal entity is registered.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.