Proposed public beneficial ownership register
A consultation paper on a proposed public beneficial ownership register has been released by the government. During the election, a public beneficial ownership register was recommended to tackle multinational tax avoidance by publicly recording who ultimately controls and receives benefits from a company or legal vehicle operating in Australia. However, while the consultation paper provides scant details, it does appear that the proposed register will encompass a broader range of entities than just multinationals and will include proprietary companies and unlisted public companies.
Consultation Paper
As a part of its election platform promises, the government has released a consultation paper seeking views to implement a public register of beneficial ownership information to record who ultimately owns, controls, and receives benefits from a company or legal vehicle operating in Australia. The ultimate aim of this proposal is to increase transparency, discourage the use of complex structures and bring Australia in line with some other G20 nations.
It is proposed that this new disclosure regime will build on the existing disclosure regime for listed entities by extending beneficial ownership disclosure requirements to a broader range of entities regulated under the Corporations Act. Over three million additional, unlisted entities would be subject to transparency measures with respect to the disclosure of their beneficial ownership information.
In the first phase of implementation, the consultation paper notes that the government will be focusing on the following entities as they are regulated by the Commonwealth and are currently required to maintain registers of legal ownership:
- Proprietary companies;
- Unlisted public companies;
- Unlisted registered managed investment schemes (MISs); and
- Unlisted corporate collective investment vehicles (CCIVs).
During the election, the proposal to implement a public register of beneficial ownership information was part of the government’s policy on “multinational tax integrity”. However, the consultation paper itself does not make any specific comments on the size of the entities captured under the scheme, and therefore may include all proprietary companies regardless of size that are currently required to be registered with ASIC.
Content of proposed beneficial ownership register
The consultation paper proposes that a regulated entity’s beneficial ownership register would include details of:
- All natural persons who satisfy at least one of the threshold requirements for registration as a beneficial owner of a regulated entity, including:
- Holding, directly or indirectly, 20% of shares or units in the entity;
- Holding, directly or indirectly, 20% of the voting rights in the entity;
- Holding the right, directly or indirectly, to appoint or remove a majority of the board of directors or the responsible entity or the corporate director of the entity;
- Having the right to exercise, or actually exercise, significant influence or control over the entity;
- All companies, registered MISs, CCIVs, or trusts that would satisfy at least one of the threshold requirements above if they were a natural person.
According to the government, the wording of the threshold requirements is designed to capture forms of beneficial ownership characterised by agreement or arrangements (whether formal or customary) to act jointly or in coordination. In those cases, each person who agrees or enters into such an arrangement would be required to be registered on the beneficial ownership register, even if their direct holding or interest is less than 20%.
As it is not always possible for regulated entities to be aware of all beneficial owners, the paper also proposes to introduce obligations on ultimate beneficial owners to identify themselves as beneficial owners and provide relevant beneficial ownership information to regulated entities. Information collected from natural persons under the register and made publicly available will include full name, full date of birth, addresses for communication and service, residential address, nationality, nature of control or influence, and the date the person became or ceased to be a beneficial owner.
Disclaimer: The information on this page is for general information purposes only and is not specific to any particular person or situation. There are many factors that may affect your particular circumstances. We advise that you contact Mathews Tax Lawyers before making any decisions.