Declaration of beneficial owners

This requirement was introduced by the legislature as part of the fight against money laundering and terrorist financing.

These provisions stem from the Sapin 2 Act of 9 December 2016, confirmed by the ordinance of 12 February 2020.

There is always a beneficial owner within a company, though they may sometimes be difficult to identify.

Under Article L. 561-2-2 of the Code monétaire et financier, beneficial owners are persons:

1 – Who ultimately control, directly or indirectly, the company

2 – Or, failing that, who legally represent the company

• More specifically, 4 criteria for identifying these beneficial owners should be noted

  • Any natural person holding, directly or indirectly, strictly more than 25% of the company's share capital

  • Any natural person holding, directly or indirectly, strictly more than 25% of the company's voting rights

  • Any natural person exercising effective control over the company's management, executive or administrative bodies

  • Where applicable, any natural person exercising coercive power over the company's general meeting

• Information to be declared

  • Beneficial owner's identity

  • Percentage of direct or indirect shareholding

  • Beneficial owner's residential address

• The obligation applies to

  • Companies

  • Economic interest groupings (groupements d'intérêt économique)

  • Associations registered with the Registre du Commerce et des Sociétés

When must this obligation be fulfilled?

• When applying for the company's registration with the Registre du Commerce et des Sociétés

• If any change occurs in the declared information (a beneficial owner changes personal address; a new beneficial owner must be declared, etc.)

• If the company's registered office is transferred to a new jurisdiction

How to fulfil it?

This declaration is made via a Cerfa form: form M'BE.

The form must be completed and signed by the company's legal representative, or by an authorised agent.

Filing the form carries a cost that depends on the stage in the company's life at which the declaration is made.

When creating or amending your company, Alex Legal assists you with filing the beneficial owners declaration.

Penalties for failure to declare

In the event of incomplete or incorrect information, the company's legal representative faces 6 months' imprisonment and a €7,500 fine. This constitutes a criminal offence.

In the context of a business relationship with a client, financial institutions are obliged to verify information relating to a company's beneficial owners before, and throughout, the business relationship. Monitoring is constant.

Regular checks must also be expected.

To avoid any disappointment, companies should therefore be conscientious regarding this declaration of beneficial owners, and ensure compliance as soon as necessary.

nota bene: Chartered accountants are aware of a company's beneficial owners' identities. This is because they are generally responsible for declaring them, each year, in the tax return (liasse fiscale).

BE = beneficial owner