Beneficial Ownership Disclosure is a global standard aimed at increasing corporate transparency and preventing money laundering. In Georgia, the new Law on Entrepreneurs (effective since 2022) and Anti-Money Laundering legislation require companies to identify and register their real owners (beneficiaries). A beneficial owner is a natural person who ultimately owns or controls the company (directly or indirectly), even if the legal owner is another company (e.g., an offshore holding). Failure to comply with this obligation leads to serious issues: blocked bank accounts, suspension of registration in the Public Registry, and administrative fines. This service helps businesses correctly identify their beneficiaries in complex corporate structures and register them in compliance with the law.
What does this service cover?
The beneficial ownership disclosure service includes:
- Structure Analysis: Studying the company's ownership chain to reveal all layers up to the ultimate natural person.
- Beneficiary Identification: Determining who qualifies as a beneficiary based on legal criteria (more than 25% share or control).
- Documentation Preparation: Collecting and legalizing/apostilling documents required for the Public Registry (passports, structural charts, extracts from foreign registries).
- Public Registry Registration: Submitting information to the Registry of Entrepreneurs and Non-Entrepreneurial (Non-Commercial) Legal Entities.
- Banking Relations: Providing beneficiary information to servicing banks as part of KYC/AML procedures.
Common Real-World Scenarios
This service is particularly relevant when:
- Offshore Ownership: A Georgian company is founded by a company registered in Cyprus or the BVI. It is necessary to show who stands behind this offshore entity.
- Complex Holding Structure: The company is owned by another company, which is owned by a fund. The lawyer traces the chain to find the controlling person.
- Opening a Bank Account: The bank refuses to open an account until the UBO (Ultimate Beneficial Owner) is clarified.
- Trusts and Nominees: When shares are registered to a nominee owner, the true owner must be declared.
Georgian Legal Framework
Beneficial ownership disclosure is regulated by the Law on Facilitating the Prevention of Money Laundering and Terrorism Financing, which defines a beneficiary (a person owning more than 25% of shares or exercising control). The Law on Entrepreneurs obliges all enterprises to maintain accurate and updated information about their beneficiaries and submit it to the Public Registry. This information is partly public and partly available only to authorized bodies.
Process: How does a specialist work?
The lawyer requests founding documents. If the founder is a foreign company, an extract from that country's registry is needed. An ownership chart is created. The lawyer fills out special forms for the Public Registry. If a beneficiary cannot be identified (e.g., dispersed shareholders), the law allows registering a member of the governing body (Director) as the beneficiary.
Why Legal.ge?
Incorrect declaration of a beneficiary can be considered a criminal offense (providing false information) or lead to service termination by banks (De-risking). On Legal.ge, you will find corporate lawyers who know how to handle complex international structures and ensure your company's full compliance with Georgian legislation.
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