ISLAMABAD: To identify real owners and shareholders of corporate entities, the Securities and Exchange Commission of Pakistan (SECP) Monday directed all Limited Liability Partnerships (LLPs) to submit information about their ultimate beneficial owners to identify persons, who actually owns the company/LLP.
The SECP has notified S.R.O. 864 (I)/2020 to issue draft amendments in the Limited Liability Partnership Regulations, 2018 here on Monday.
The SECP has defined an ultimate beneficial owner as a natural person who ultimately and effectively owns or controls a limited liability partnership through direct or indirect rights or who shares at least one fourth of the net profits and losses of the partnership.
Under the revised regulations, every LLP shall take reasonable measures to identify and obtain the information of its ultimate beneficial owners, as per LLP Form IX, by issuing a notice to every partner who shares at least one fourth of the net profits and losses of the partnership.
Every LLP required to maintain a register of ultimate beneficial owners shall authorize any of its partners or designated partners or officers to provide the information required under this regulation to the registrar for verification purposes, or to any other authority or agency pursuant to the powers to call for information entrusted by law to such authority or agency, and to provide further assistance as may be required, and the name and particulars of such an authorized person shall be furnished to the registrar along with the declaration specified, SECP maintained.
In reply to the notice issued by the LLP, every partner to whom the notice has been issued, shall submit a declaration in the form specified as LLP Form X to the LLP, within fourteen days of the notice, indicating the name, address and other particulars as specified therein, as are necessary to properly identify the ultimate beneficial owner. Provided that any person, becoming a new partner shall also, within a period of fourteen days of his name being entered in the register of partners, submit the said declaration to the LLP, SECP stated.
Where any change occurs in the particulars of ultimate beneficial owner or his ownership of the LLP, the partner referred to shall, within a period of 14days from the date of any change, submit a declaration to the LLP as per LLP Form XI, stating the nature of change and other particulars as mentioned therein.
Where a declaration is made to an LLP), the LLP shall make a note of such declaration in a register of ultimate beneficial owners to be maintained by it for such purpose containing particulars like name, father's Name/Spouse's Name, CNIC/NICOP/Passport no. along with date of issue, nationality, country of origin (in case of foreign national or dual national), usual residential address, email address, date on which rights or controlling interest acquired in the LLP, date on which rights or controlling interest acquired in the LLP from former ultimate beneficial owner. In case of indirect rights or controlling interest being exercised through intermediate LLP, entities or other legal persons or legal arrangements in the chain of ownership or control, names and particulars of such entities.
It is important to mention here that the section 453 of the Companies Act, 2017 (the 'Act') requires every officer of a company to endeavor to prevent commission of any fraud, offences of money laundering including predicated offences as provided in the Anti-Money Laundering Act, 2010 with respect to affairs of the company, who shall take adequate measures for the purpose.
Financial Action Task Force (FATF), an independent inter-governmental body, has issued international standards containing recommendations to combat money laundering and the financing of terrorism and proliferation.' The FATF recommendations require countries to take measures to prevent the misuse of legal persons for money laundering and terrorist financing, and ensure that there is adequate, accurate and up-to-date information available with the companies on the ultimate (actual) beneficial ownership and control of legal persons that can be accessed in a timely manner by competent authorities.
Accordingly, companies having legal persons as members or shareholders are directed to take reasonable measures to obtain and maintain up-to-date information relating to their ultimate beneficial owners, i.e. natural persons or individuals who ultimately own or control the company, in a register of ultimate beneficial ownership (the 'register'). The information is required to be obtained and maintained irrespective of the number of levels of ownership pattern, until the natural person or individual exercising ultimate ownership or control and lying at the end of the ownership chain.
Copyright Business Recorder, 2020
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