Analytics

Today, the issue of business transparency in Ukraine is one of the key factors for the stable development of companies and compliance with legal requirements. One of the responsibilities of legal entities is to update information about the ultimate beneficial owner.

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Failure to comply with the requirements for submitting up-to-date information about the ultimate beneficial owner entails serious consequences, in particular, financial sanctions. Given the changes in legislation and the increased attention of regulatory authorities to this issue, businesses must act quickly and effectively.

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LET'S START FROM THE BEGINNING: WHO IS THE ULTIMATE BENEFICIARY OWNER?

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The ultimate beneficial owner is an individual who exercises decisive influence on the activities of the company (directly or through other legal entities). An important condition is the direct or indirect ownership of 25% or more of the authorized capital or votes in the company.
It is worth noting that the very need to provide information about beneficiaries arose due to the requirements of the Association Agreement between Ukraine and the EU, the implementation of the FATF International Financial Monitoring Standards into Ukrainian legislation. Such information is used to monitor and detect money laundering and transactions for the purpose of drug and arms trafficking.
In addition, information about the ultimate beneficial owner is used to control cash flows during financial monitoring.

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THE IMPORTANCE OF UPDATING INFORMATION ABOUT THE ULTIMATE BENEFICIARY OWNER FOR BUSINESS

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In practice, many Ukrainian companies face difficulties when updating data about the ultimate beneficial owner. The main problems include:
- the complexity of the procedure for submitting documents (in the case of non-residents in the company's ownership structure, there is a problem of obtaining relevant documents from abroad);
- the need to collect additional information, such as a description of the ownership structure;
- failure to update data in a timely manner due to changes in the company.

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Such situations can lead to fines and other financial and reputational risks.

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When is it necessary to submit information about the ultimate beneficial owner?

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it is necessary to notify the state registrar about the ultimate beneficial owner when registering a legal entity;
if the company was registered before 03.10.2023, the first submission of information about the ultimate beneficial owner and ownership structure should be submitted by the end of 90 days from the date of termination of martial law in Ukraine;
if information about the ultimate beneficial owner has already been submitted and in the event of a change in the ultimate beneficial owner of the company, state registration of changes to information about the ultimate beneficial owners of the company is carried out within 30 business days from the date of such changes.

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What risks await companies in case of violation of the requirements?

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- Fines. Failure to submit or untimely submission of information about the ultimate beneficial owner of a legal entity or its absence entails a fine on the legal entity in the amount of from 17,000 to 340,000 hryvnias.
In addition, an administrative fine is provided for the head (director) of a legal entity for failure to submit or untimely submission of information about the ultimate beneficial owner of a legal entity or its absence in the amount of from 17,000 to 51,000 hryvnias. At the same time, during martial law and three months after its termination, administrative liability does not apply.
- Loss of reputation. Participation in tenders, attracting investors or partners will become problematic without a transparent ownership structure.

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TIPS FOR BUSINESS

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1. Check the relevance of the data.
Make sure that the information about the ultimate beneficial owner is true. This applies to both internal documentation and information in the Unified State Register.
2. Involve specialists.
Updating information about the ultimate beneficial owner requires attention to detail and knowledge of the legislation. The law firm "ARMADUM LAWYERS" is ready to provide legal support for this process at all stages, helping to avoid mistakes and sanctions.
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WHY SHOULD YOU CHOOSE THE "ARMADUM LAWYERS" TEAM?

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Expertise and experience.
Our lawyers have many years of experience in corporate law, in particular, in successfully helping companies update information about the ultimate beneficial owner and represent your interests when interacting with government agencies.

Individual approach.
We know that each business is unique. That is why we analyze the needs of your company and offer solutions that meet your realities.

Efficiency and reliability.
By cooperating with the law firm "ARMADUM LAWYERS", you receive prompt legal support that will allow you to avoid fines and ensure the transparency of your company.
The law firm "ARMADUM LAWYERS" is ready to become your reliable partner in this process, providing professional support and effective resolution of legal issues.

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