In a legal and economic context marked by the intensification of transparency measures and anti-money laundering prevention, the identification and declaration of ultimate beneficial owners has become a central obligation for numerous legal entities. Law No. 129/2019, in its updated form, clearly regulates who is considered an ultimate beneficial owner, what the reporting obligations are, the deadlines to be observed, and the sanctions applicable in case of non-compliance.
- Who is the ultimate beneficial owner?
According to Article 4 paragraph (1) of Law No. 129/2019, the ultimate beneficial owner is any natural person who owns or controls directly or indirectly the client or on whose behalf a transaction, operation, or activity is carried out. For commercial companies, according to paragraph (2) letter a), ultimate beneficial owners include:
- Natural persons who hold more than 25% + 1 share or a sufficient percentage to exercise control;
- Persons who exercise control through other means;
- With the exception of companies listed on stock exchanges, which are subject to international transparency rules.
In the case of associations and foundations, the ultimate beneficial owners are the founders or persons in whose interest the organization operates, members of the board of directors, persons authorized by it, as well as any other natural person exercising effective control.
- Declaration obligation
The law imposes the filing of a declaration regarding the ultimate beneficial owner in the following situations:
- Upon registration: all legal entities subject to registration with the Trade Registry must declare the ultimate beneficial owner at the time of incorporation.
- Upon modifications: if changes occur in the structure of ultimate beneficial owners, the declaration must be updated within 15 days.
- Annually: for entities that have shareholders in jurisdictions with fiscal risk or susceptible to money laundering, the declaration is renewed annually, within 15 days from the approval of the financial statements.
Autonomous regies, national companies/societies, and entities wholly or majority-owned by the state are exempted from the declaration obligation.
- Special obligations for entities with shareholding from risk jurisdictions
According to Article 56 paragraph (13), entities that have in their structure shareholders from non-cooperative fiscal jurisdictions, from areas with high risk of money laundering/terrorism financing, or monitored by international bodies, must file the declaration regarding ultimate beneficial owners annually, even if no modifications have occurred. This obligation is intended to increase transparency in the face of cross-border risks.
- Compliance deadlines
To avoid sanctions, entities must observe the deadlines provided by law:
- Upon registration: together with the filing of incorporation documents;
- Upon modifications: within 15 days from the date of their occurrence;
- Annually: within 15 days from the approval of the balance sheet;
- For entities existing on July 21, 2019: by November 1, 2020 (deadline already expired, but relevant for compliance history).
- Applicable sanctions
Failure to comply with declaration obligations may result in significant sanctions:
- Companies: fine between 5,000 and 10,000 lei. If within 30 days of the application of the fine the declaration is not filed, dissolution of the company may follow according to Article 237 of Law No. 31/1990.
- Associations and foundations: initial fine between 200 and 2,500 lei, followed, in case of recidivism, by sanctions between 500 and 5,000 lei and the possibility of dissolution.
Conclusion
Compliance with obligations regarding the declaration of the ultimate beneficial owner is not merely an administrative formality, but an essential step in consolidating economic transparency and trust in the business environment. Law No. 129/2019 provides a clear and strict framework, and non-compliance attracts serious legal consequences. The firm recommendation for any entity is to establish an internal procedure for monitoring modifications and to periodically consult the Trade Registry or legal advisors to avoid legal risks.
Co-authors:
Ioana Chiper Zah
Timeia Lupșa