Image by James Petts
Until now the controllers of most local businesses could sit quietly in the background, passively earning money. To the world at large they appeare to be unconnected with the company providing their income or wealth. In the new world of AEOI and FATCA, goverments no longer condone such anonymity. These folks are now deemed Registerable Controllers” whom we describe in more detail further on.
For government departments to learn who actually controls the business is a significant chore today. So legislation will now go into effect on 31 March 2017 to rectify that problem.
From that time forward, some companies must maintain a register of their “Registerable Controllers”. Government owned companies, financial institutions and companies traded on a stock exchange are exempt.
Their registrar’s office or the registered address will keep a new document known as the “Register of Controllers”. You can find more detail on it here
The legislation is interesting in that it doesn’t say who IS a registerable controller; it defines who isn’t one.
If you (either as a person or a company) control a company indirectly through one or more controllers, you aren’t a controller. In that case, don’t have to appear on the register. In other words, for example:
- If you are company A and own or have a significant interest in company B and
- company B owns company C,
- then B would have to register with C as its controller and
- A would have to register with B as its controller.
Because 25% interest in the company or in its voting shares is the cut-off. A company could have up to four registered controllers, if they each controlled 25% of the voting shares.
This is just a brief summary of how the law works. There are more details for the immense variety of ownership and control structures that could exist, but the principal is always the same:
- If the company is already statutorily required to keep a record of its controllers somewhere, it isn’t required to maintain a second copy.
- If an individual or legal person controls a company indirectly through one or more companies, they need only be listed at the directly owned company(ies) subject to a above.
As always, the devil is in the details, which you can find here.