A beneficial owner is a natural person who holds or controls at least 25% of the legal entity’s shares or voting shares in direct or indirect ownership. The beneficiary is also the individual who manages a corporate structure or builds commercial relationships on account of or for the benefit of the true beneficiary, and the entity who performs the momentary trade.
All Latvian firms are required to disclose information about their beneficial partners to the Republic of Latvia’s company registration.
The need stems from recent changes to the law governing the prohibition of financial fraud and criminal funding. The amendments impose an obligation on all companies to register their beneficial owners and record the related changes in the register of Enterprises.
Registration of beneficial owner
To enroll a beneficial owner, a particular registration form explaining how the beneficiary manages the firm, including details on how the intermediate individuals engaged assure management, must be filed to the register of companies. As well, information including the personal data of the beneficiaries must be provided. In the case of intentionally fraudulent filing to the registry of enterprises, an individual may be held accountable according to the prosecutorial proceedings.
Changes in Beneficial Ownership
When applying for changes to the participant registration at the same time, the application form must also contain information about the Limited Liability Company PLG.
The PLG is a legal person, the founder of the SIA, or an individual who supervises the SIA, and is at least a legal individual who holds more than 25% of the SIA’s equity shares/voting powers, either actively or passively. About a limited liability firm, the legal representative must specify the following:
The legal representative must provide the authorities with personal information about the company and its management board. The person must specify the name and surname, legal status, Identification proof, residency proof, and nationality.
Methods of management
The documents submitted to the enterprise registry for changes in beneficial owner must contain the ways of exercising control over the company. Following are the ways one can have control over the management of the company as a beneficial owner:
- As a member
If the beneficial owner is a member of the management council. He must submit the details of his plans regarding the management of the company.
- As a separate controlling person
- If the true beneficiary is the indirect owner or indirectly controls the SIA, they must provide the details on their legal status in the company. You can become the beneficial owner on the basis of:
- Contract authorization,
- Ownership of SIA,
- Transactional relationship,
- Through legal arrangements as a manager,
- Through legal arrangements as a founder,
- Through legal arrangements as a principal.
Details of the third party
information on the person through whom the control is carried out must be submitted to the authorities. Also provide the details on the status of the person, whether he is a member of the council or he has a contractual relationship or transactional relationship with the company. Also mention if he is a founder, manager, or principal of SIA.
Personal details of the third party person must also be included such as his/her name, identification proof, residence proof, passport, registration number, etc.
The Enterprise Register has the right to request a documentary justification for the control carried out by the beneficial owner, as well as a document confirming the relevance of the information provided.
In circumstances where material on the beneficiary has already been recorded in the Business Registry and the request indicates that those very data has not changed, the right to seek the required documentation should apply to the entry of new data on the PLG.