Registered companies deadline to file beneficial ownership will promote T&T as a transparent investment destination
Information on “who owns what” is critical to all economies especially economies that are attempting to compete in an international marketplace. Investors are always wary of investing in companies, and countries, where ownership of investments is dubious and may be susceptible to money laundering from illegal activities. Therefore, in order to promote transparent investment, and to help with a country’s credit ratings, Trinidad and Tobago has to become “transparent”.
Both international and local investors have to be confident of where they are placing their funds because of the risk of being “tarnished by the same brush” should it come to light that their investee companies are not exactly “kosher”. Furthermore, in the virtual world in which we live, it is easy to trace a company’s source of funds, as already evidenced by many well-known international investigations and scandals.
As the ‘old timers” say, “an ounce of precaution is worth more than a pound of cure”. As a country, we need to get this right and show the world that doing business in T&T means doing good ethical business! We do not want to be caught out!
In 2019 our Government, therefore, passed the necessary legislation by which all companies must annually declare full information of the beneficial ownership of the shares it has in issue. Only publicly listed companies are exempt for the requirements of this legislation.
The necessary amendments to the Companies Act were proclaimed on May 30, 2019 and the Companies Registry has set a deadline on December 31, 2020 by which all registered companies are required to submit full details of beneficial ownership* of their shares in issue. Failure to comply with the legislation will mean that every Director and Officer will be subject to the following:
- The imposition of hefty fines of $10,000.00 plus $300.00 for every day the offence continues;
- Conviction; and
- Imprisonment for 3 years!
Also, it is no longer permissible to have a company with no shares in issue! The Registrar is making more amendments to this area of the legislation and, therefore, we can look forward to some additional changes!
Another area of change is in respect of bearer shares. Locally registered companies cannot issue bearer shares but where a company had previously issued bearer shares under the older Ordinance, these shares must now be converted in accordance with the Act. Also, external companies (companies not incorporated in T&T but registered to do business in T&T) may not issue bearer shares in T&T.
The Act defines beneficial ownership* as:
a. The natural person on whose behalf a transaction is conducted, or
b. The natural person who exercises ultimate effective control over a legal person or arrangement, or
c. The natural person who ultimately owns or controls the company, through indirect or direct ownership, or control through other means, or
d. The actual person who exercises control of a legal person or arrangement, or
e. The natural person who holds the position of senior managing official, or
f. In the case of trusts, the settlor, trustee, protector, beneficiaries or any other person exercising ultimate effective control, or other types of legal arrangements.
g. Other types of legal arrangements, the identity of persons in equivalent or similar positions.
The list is very comprehensive and leaves no doubt about what beneficial ownership encompasses!
Shareholders must, therefore, submit declarations of beneficial ownership within a stipulated time frame, and based on those declarations, the company has to file a list of the natural beneficial owners of its shares on a Form 45 with the Registrar. There may be several layers until the ultimate “natural” person who owns the shares is revealed, much like peeling back the layers of an onion to get to its centre. This will be an annual exercise. Furthermore, any changes to that status, whether by transfer or a new issue of shares, must be reported to the Registrar on the prescribed form within the prescribed time. Again, the same stringent penalties apply for non-compliance!
The deadline for compliance is December 31, 2020! If you haven’t started this exercise as yet, please contact Corpsec.Internal@aegistt.com and we will provide assistance. Hurry time is running out!
Author: Janis Pogson