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Real ownership in the annual accounts

Actual ownership

Identification of the beneficial owner has become one of the due diligence most important that must be carried out by the subjects bound by the regulations for the fight against money laundering and the financing of terrorism; However, how does it affect the annual accounts?

As we already know, the annual accounts are a set of financial documents that a company or entity must prepare at the end of each financial year (which will generally coincide with the calendar year) to reflect its financial situation, results and cash flows during that period. These annual accounts are mainly made up of three financial statements: the balance sheet, the profit and loss account and the cash flow statement, in addition to including notes or the management report.

The annual accounts will be deposited in the Commercial Registry of the town where the company has its registered office no later than July 30, after having been formulated and approved in accordance with the legally established deadlines. 

In relation to real ownership, we can note that it is a due diligence originated by the Law 10/2010, of April 28, on the prevention of money laundering and the financing of terrorism for prevent money laundering and terrorist financing. It refers to identifying and knowing the natural persons who own, control or benefit from an entity, whether a company, foundation, trust or other similar structure.

In this way, and according to article 4 of the aforementioned law, the person or natural persons who ultimately own or control, directly or indirectly, a percentage greater than 25 percent of the capital or voting rights of a legal entity, or that by other means exercise control, direct or indirect, of a legal entity.

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It is necessary to point out that if there is no person who meets these requirements, it must be reflected as the real owner at the administrator or administrators of the company, referred to as the assimilated real owner.

In the same way, and in relation to the definition of "control" we must refer to article 42.1 of the Commercial Code, to know exactly when we will find ourselves in a control or group situation.

Thus, there are two possible ways to identify the real owner: by control or possession (percentage greater than 25% of the share capital, or whoever has more than 25% of the voting rights) or by administration (the one who exercises control, direct or indirect, of the management of a legal entity).

It goes without saying that, in addition, the participating companies in the company in question must be identified and, in turn, the beneficial owners of the same who meet the stated requirements must be identified.

That said, and in relation to the annual accounts, It is mandatory to complete the form official of the Commercial Registry for the identification of the ultimate beneficial owner, which must be carried out through the D2 computer program and must be completed each year, even though the beneficial ownership has not been modified since the last time it was presented, so that the deposit of the annual accounts with the Commercial Registry is correct. All of this, furthermore, regardless of the type of annual accounts that are deposited (abbreviated, SMEs, etc.).

For more information, click here to see a video of Registrars of Spain explaining and analyzing how to complete the beneficial ownership form in the annual accounts. 

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