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BENEFICIAL OWNER REQUIREMENT

DEFINITION OF A BENEFICIAL OWNER AND DISCLOSURE REQUIREMENTS

Following the enactment of Companies Act No. 10 of 2017, the requirement to declare the Beneficial Owners of shares held in a company is being enforced by the Patents and Company Registration Agency (Pacra). ORBS strives to ensure all our esteemed clients are compliant with this measure.

The companies Act 10 of 2017 defines a beneficial owner as : a natural person who— directly or indirectly, through any contract, arrangement, understanding, relationship or any other means ultimately owns, controls, exercises substantial interest in, or receives substantial economic benefit from a body corporate; or exercises ultimate and effective control over a legal person or legal arrangement.

Elements of Beneficial Ownership

DIRECT OR INDIRECT INFLUENCE A beneficial owner is not only one whose influence can be seen and noticed but one whose influence can be through other people and not him directly.
RELATIONSHIP/UNDERSTANDING One cannot just claim to be a beneficial owner. There must be a form of agreement or understanding to that effect. The fact that it can be through a contract, arrangement, understanding, relationship or other means entails that it can either be oral or written, express or implied, as long as it leads to the communication of one becoming a beneficial owner.
BENEFIT/ULTIMATE & EFFECTIVE CONTROL The term ‘beneficial owner’ itself explains this last element. One should either have a considerable amount of interest, economic benefit and operational control over a legal person which is a company or body corporate.