LLP - Ownership Information
Information contained on these pages references Guernsey legislation for Registry products and services. Further details and information regarding the requirements of other Bailiwick legislation can be found on the Guernsey Financial Services Commission website http://www.gfsc.gg/FCA/Pages/Handbook-and-Regulations.aspx
Ownership Information
Beneficial Ownership - Who really owns a legal entity?
(n.b a glossary of terms is available at the end of this document)
The Beneficial Ownership Regime as it applies to Limited Liability Partnerships (LLP)
The term 'beneficial ownership' is used to refer to the ultimate person or group of persons who gain benefits from the activities/profits/income of a legal entity, i.e. a person who enjoys the possession/benefits of ownership, even if the ownership/title appears to be in the name of another (a nominee).
The Limited Liability Partnerships (Guernsey) Law, 2013 has specific sections dealing with beneficial ownership and is the mechanism used in Guernsey to address the relevant FATF (see glossary) recommendations. Schedule 2 of that Law contains the relevant sections.
The Law provides a general requirement for all Guernsey registered Limited Liability Partnerships to have a resident agent (it is the obligation of the resident agent to ascertain who the beneficial owner is). The resident agent is either an individual, resident in Guernsey who is a member of the LLP, or a Corporate Services Provider (see glossary) [Schedule 2, section 1].
If an LLP has more than one who is eligible to act as resident agent, than some or all of them may be resident agents, and if this is the case, their functions and liabilities shall be joint and several.
An LLP which fails to comply with this requirement is guilty of an offence. [Schedule 2, section 1(4)].
In addition failure to comply renders an LLP liable to be struck of the Register of LLPs, in accordance with Part VI, section 62(1)(d).
However, the Law has provided certain exemptions from the above requirements, [Schedule 2, section 1(2)(a)]. An LLP is exempted from the requirement to have a resident agent if the LLP is a closed-ended investment scheme or an open-ended investment scheme, both within the meaning of the Protection of Investors (Bailiwick of Guernsey) Law, 1987.
Record of the Resident Agent
Schedule 2, section 2 requires an LLP to keep a record of who its resident agent is. This record shall be, in the case of a resident agent who is a member his name; and in the case of a CSP the CSP's name and its address. Any change in the resident agent, or a change of details relating to the resident agent must be filed with the Registrar within 14 days of the date of the change.
An LLP which fails to comply with these requirements is liable to a civil penalty.
Duties of the Resident Agent
Schedule 2, section 3 of the Law requires the resident agent of an LLP take reasonable steps to ascertain the identity of the persons who are the beneficial owners of the members' interests in that LLP.
Where a resident agent has ascertained that a member of an LLP is not a beneficial owner of that member's interest, he shall keep a record of the required details of the beneficial owner in respect of that member in the 'record of beneficial owners'. [Schedule 2, section 4]
The record of beneficial owners shall be kept at the LLP's registered office. The required details are;
· In respect of an individual; his name, his usual residential address, his nationality and his date of birth.
· In respect of a legal entity or overseas legal entity: its corporate/firm name, its registered office (or, if it has not registered office, its principal office), its legal form and the law by which it is governed, and if applicable, the register in which it is entered and its registration number in that register.
· In respect of a class of beneficial owners of such a size that it is not reasonably practicable to identify each member of the class, information sufficient to identify and describe the class of individuals who are beneficial owners.
The resident agent of an LLP may give notice [Schedule 2, section 5] to a member of that LLP requiring the member to disclose:
· whether they are holding their interest in that LLP for their own benefit or the benefit of another person,
· if for the benefit of another person , the required details in respect of that person, and
· The accounting records of the LLP.
A member who receives a notice must comply with that notice within such reasonable time as may be specified in the notice. A member who without reasonable excuse, fails to comply with the notice, OR, makes a statement in response to a notice which is false, deceptive or misleading in a material particular, shall be guilty of an offence. [Schedule 2, section 5(2) and 5(3)].
Disclosure of Beneficial Ownership Information by the Resident Agent
The resident agent shall, upon receipt of a certificate signed by any of the following:
· Her Majesty's Procureur,
· the Director General of the GFSC,
· the Chief Officer of Police, or
· the Chief Officer of Customs
(or any person appointed by any of them for that purpose)
disclose, to her Majesty's Procureur, the GFSC, a police officer or a customs officer, any information required by that person which the resident agent is required to hold by virtue of his obligations under the Law, and any other information he holds in respect of the beneficial ownership of an LLP. [Schedule 2, section 7]
A resident agent who, without reasonable excuse, fails to comply, or makes a statement which is false, deceptive or misleading in a material particular, in response to a certificate, is guilty of an offence.
A resident agent is also guilty of an offence (Tipping Off) if he knows, or suspects that a certificate has been issued or is proposed to be issued, and he discloses to any person information, or any other matter, which are connected with the issue of that certificate which may prejudice;
- any criminal or regulatory investigation which is or may be carried out, whether in Guernsey or elsewhere, or
- any criminal or regulatory proceedings which have been or may be initiated, whether in Guernsey or elsewhere. [Schedule2, section 8]
The FATF 40 Recommendations
The FATF have put forward a series of 40 Recommendations (The Recommendations) that function as a comprehensive and consistent framework of measures with the objective of combating money laundering and terrorist financing.
Countries are encouraged to implement the recommendations, although it is recognised that Countries will have diverse and varying legal, administrative and operations frameworks for managing their financial systems. Accordingly the recommendations act as a set of minimum international standards for Countries to implement via measures adapted to suit their particular regimes and circumstances.
The recommendations address a number of measures and topics. For the purposes of the Guernsey Registry the significant recommendations relate to enhancing transparency and the availability of beneficial ownership information relating to the legal entities administered through the Guernsey Registry.
Glossary of Terms
Beneficial Ownership - The term 'beneficial ownership' is used to refer to the ultimate person or group of persons who gain benefits from the activities/profits/income of a legal entity, i.e. a person who enjoys the possession/benefits of ownership, even if the ownership/title appears to be in the name of another (a nominee).
Corporate Services Provider (CSP) - means a person who holds a full fiduciary licence, issued by the GFSC, within the meaning of the Regulation of Fiduciaries, Administration Businesses and Company Directors, etc (Bailiwick of Guernsey) Law, 2000.
FATF - The Financial Action Task Force - an inter-governmental body to set standards and to promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and the financing of proliferation, and other related threats to the integrity of the international financial system. (FATF/OECD February 2012)
Guernsey Financial Services Commission (GFSC) - is the regulatory body for the finance sector in the Bailiwick of Guernsey. The Commission's primary objective is to regulate and supervise financial services in Guernsey.
Legal Entities - These include Companies, Foundations, Limited Partnerships, and Limited Liability Partnerships.
Resident Agent - The person responsible for ascertaining the identity of the beneficial owners of a company.
