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The beneficial owner is the responsibility of the Board of Directors

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Has the Swedish Companies Registration Office contacted us regarding the notification of the beneficial owner? It is the board that is responsible for the notification and a failure to do so can have major consequences. The law applies to boards in almost all forms of organization, from limited liability companies to tenant-owner associations.

Why should beneficial owner be specified?

It is the board of directors that is responsible for informing about the beneficial owner under the Act on the Registration of Principals. The law is based on the EU Money Laundering Directive, which means that all EU countries must have a register of beneficial owners.

What is the purpose of the registry?

The directives were created to make money laundering more difficult and thus the financing of terror and crime. Previously, the Board of Directors has not been responsible for checking whether information about shares and votes is really correct. Banks and financial supervisory authorities should be able to find out who is behind a company.

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Who is the beneficial owner?

The beneficial owner is the natural person(s) who ultimately control a company or association. The vast majority of companies and associations are obliged to investigate who is the principal, but the rules look different depending on the type of organization:

Joint-stock company
All types of limited liability companies must investigate who is the principal and report this to the Swedish Companies Registration Office. Newly registered companies are also obliged to notify within four weeks. The rules apply to:

  • limited liability companies, even those in bankruptcy where the bankruptcy is not terminated;
  • fund management company
  • credit market companies
  • securities companies.

The beneficial owner is the person or persons who own or control the limited liability company. It can look different, for example, the person can:

  • have more than 25 percent of the votes through shares
  • have the right to appoint or remove more than half of the directors.

As in the case of limited liability companies, all tenant-owner associations must notify the beneficial owner. A person can control a housing association in various ways, such as:

  • have more than 25 percent of the vote
  • have the right to appoint or remove more than half of the directors.
Non-profit organizations usually have more than three members with 1 vote each. Since one needs to control more than 25 percent as a beneficial owner, there is usually no beneficial owner in a nonprofit. If there is no beneficial owner, you do not need to report anyone to the Swedish Companies Registration Office. However, this only applies to non-profit associations.
On the Swedish Companies Registration Office’s website you can read more detailed information about beneficial owners of various companies and associations.

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Investigate and report

When you have investigated whether the company or association has a beneficial owner or not and who or who it is, you must report it. Registration is made to the Swedish Companies Registration Office for a small fee and must be done digitally via their web service. The person who reports must be an authorized representative or representative of your organization.

What happens if we don’t report?

Non-notification can have major consequences. Among other things, your company or association may have problems in relation to banks and credit reporting agencies.

  • You are required to report by law.
  • Not making a notification in time entails a marking that serves as a warning signal for everyone who has to do with the company / association.
  • Non-notification is a public information that is publicly available online.
  • Banks and credit reference agencies, use the register for risk assessment. If your organization is not included, it may mean that you get worse terms or that you are denied to enter into an agreement with eg. a bank.
  • The Swedish Companies Registration Office may impose periodic penalty payments on you until a notification has been made.

Can you not find out who is the beneficial owner? Then you should report it as well.

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