Reminder: All companies must now register in the Transparency Register

The German Transparency Register is being transformed into a complete register. All legal entities under civil law and all partnerships which are registered in the Commercial Register must register their "real" or "fictitious" beneficial owners. First deadlines expire in March 2022. Is my entity obliged to register? If so - by when?

Unlike in the past, information recorded in the Commercial Register or other public registers can no longer substitute an entry in the Transparency Register. The notification requirements are simultaneously also being extended to listed companies and foreign entities with indirect real estate holdings in Germany. More information on the new legal situation can be found in our Update on the Transparency Register.

Deadlines

The German "Transparency Register and Financial Information Act" [Transparenzregister- und Finanzinformationsgesetz – TraFinG], which came into force on 1 August 2021, provides for different deadlines for registration depending on the legal form of the respective entity, some of which already expire on 31 March 2022. All affected entities should therefore urgently check whether, and by when, they need to make an additional notification to the Transparency Register.

The deadlines for the notification of beneficial owners vary depending on the legal form of the entity:

• stock corporation (AG), societas europaea (SE) or partnership limited by shares (KGaA): by 31 March 2022
• limited liability company (GmbH), (European) cooperative or Partnerschaftsgesellschaft: by 30 June 2022
• all other cases (in particular, general partnership (OHG) and limited partnership ((GmbH & Co.) KG): by December 31, 2022

These transitional periods only apply to notification obligations arising from the amendments under the TraFinG. If an unfulfilled notification obligation already existed before these changes, the notification must be made immediately. Failure to do so may result in fines.

Cancellation of substitute effect of other registrations

Most importantly, the new law cancels the previous rule that information shown in other online registers, in particular the Commercial Register, may substitute a registration in the transparency register. Beneficial owners must therefore be notified to the Transparency Register even if the required information can be derived from another register. If, for example, the beneficial owners of a limited liability company are evident from the list of shareholders in the Commercial Register, they did not need to be notified to the Transparency Register in the past. Now, these beneficial owners will have to be registered in the Transparency Register, too.

The same applies if there are no "real" beneficial owners, in particular in cases where no individual person directly or indirectly owns or controls more than 25% of the share capital and/or voting rights. In this case, the legal representatives of the entity are considered "fictitious" beneficial owners and must now always be notified to the Transparency Register, too. 

Privileged treatment of listed companies abolished

Furthermore, the previous rule that companies listed on an organized market (and, if applicable, their subsidiaries) need not register their beneficial owners has also been abolished by the new law. Like all other entities, listed companies must now disclose their beneficial owners. However, there are still uncertainties as to how exactly beneficial owners of listed companies are to be determined under the German Anti-Money Laundering Act [Geldwäschegesetz - GwG].

Extended notification obligations for foreign entities with German real estate holdings

The notification requirements for foreign entities with German real estate holdings have also been extended. Previously, foreign entities se were only subject to notification requirements if they themselves acquired real estate in Germany and were not entered in a transparency register of another EU member state yet. Now, the notification requirement will also apply in case of an indirect acquisition of real estate. For example, the acquisition of a holding of at least 90% of the shares in another real estate owning entity may be sufficient.

Notification obligation for registered civil law partnerships (GbR) only from 2024

Under another new law, the Partnership Law Modernization Act [Gesetz zur Modernisierung des Personengesellschaftsrechts - MoPeG], many civil law partnerships (GbR) will have to disclose their beneficial owners in the future (Newsletter MoPeG). However, there is no acute need to take action here yet, as the law only enters into force from 1 January 2024.

Need for action

Because of the deadlines, some of which may expire in just a few months, there is an acute need for action! Oppenhoff has many years of experience in the comprehensive support of companies and partnerships, including notifications to the Transparency Register. Whether you are a shareholder/partner or a legal entity, we would be pleased to advise you on the individual effects of the reform.

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