Companies (Beneficial Ownership) Act 2012

Link to law: https://legislation.gov.im/cms/images/LEGISLATION/PRINCIPAL/2012/2012-0009/CompaniesBeneficialOwnershipAct2012_2.pdf
Published: 2015-11-01

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Companies (Beneficial Ownership) Act 2012

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AT 9 of 2012

COMPANIES (BENEFICIAL OWNERSHIP)

ACT 2012

Companies (Beneficial Ownership) Act 2012 Index


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c i e
COMPANIES (BENEFICIAL OWNERSHIP) ACT 2012

Index Section Page

1 Short title .......................................................................................................................... 5
2 Commencement .............................................................................................................. 5
3 Meaning of beneficial owner ......................................................................................... 5
4 Companies to which this Act applies .......................................................................... 6
5 Requirement to have a nominated officer ................................................................... 6
6 Record of nominated officer .......................................................................................... 7
7 Duty of members ............................................................................................................ 7
8 Required details .............................................................................................................. 8
9 Other consequences of failure to disclose beneficial ownership .............................. 9
10 Disclosure of beneficial ownership information by nominated officer .................. 9
11 Tipping off ..................................................................................................................... 11
12 Privileged information ................................................................................................. 11
13 Offences .......................................................................................................................... 12
14 Other provisions concerning beneficial ownership ................................................. 12
ENDNOTES 13

TABLE OF ENDNOTE REFERENCES 13

Companies (Beneficial Ownership) Act 2012 Section 1


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COMPANIES (BENEFICIAL OWNERSHIP) ACT 2012

Signed in Tynwald: 11 December 2012
Received Royal Assent: 11 December 2012
Announced to Tynwald: 11 December 2012
AN ACT
to require certain companies to appoint nominated officers to hold
information about beneficial owners of such companies; to require members of
such companies to provide information concerning beneficial ownership to
nominated officers; and for connected purposes.
BE IT ENACTED
by the Queen’s Most Excellent Majesty, by and with the advice and
consent of the Council and Keys in Tynwald assembled, and by the authority of the
same, as follows:—
1 Short title

The short title of this Act is the Companies (Beneficial Ownership) Act 2012.
2 Commencement

(1) This Act (other than section 1 and this section) comes into operation on
the day appointed by the Treasury and different days may be appointed
for different provisions and different purposes.1

(2) An order under subsection (1) may make transitional and saving
provisions which the Treasury considers necessary or expedient.
3 Meaning of beneficial owner

(1) In this Act, “beneficial owner
”, in relation to a member’s interest in a
company means the person ultimately beneficially interested in the
membership interest, and “beneficial ownership
” is to be construed
accordingly.
(2) Beneficial ownership may be traced through any number of persons or
arrangements of any description.
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4 Companies to which this Act applies

(1) Subject to subsection (2), this Act applies to companies to which the
Companies Acts 1931 to 2004 apply, including each of the following —
(a) a company within the meaning of the Companies Act 19311;
(b) an existing company within the meaning of the Companies Act
1931;
(c) a protected cell company within the meaning of the Protected Cell
Companies Act 20042;
(d) an incorporated cell company within the meaning of the
Incorporated Cell Companies Act 20103 to which the Companies Acts
1931 to 2004 apply;
(e) an incorporated cell within the meaning of the Incorporated Cell
Companies Act 2010 to which the Companies Acts 1931 to 2004
apply; and
(f) a company continued in the Island under Part I of the Companies
(Transfer of Domicile) Act 19984.
(2) This Act does not apply to a company which is —
(a) incorporated outside the Island;
(b) listed on a stock or investment exchange recognised by the
Treasury for the purposes of this section;
(c) a collective investment scheme (within the meaning of section 1 of
the Collective Investment Schemes Act 20085) which is an authorised
scheme, an international scheme or an exempt scheme within the
meaning of that Act; or
(d) of any other class or description prescribed for the purposes of
this section by an order of the Treasury.
(3) An order under subsection (2)(d) must be laid before Tynwald.
(4) In subsection [(2)(b)]2
, an exchange is “recognised
” if its name or another
suitable description of it is published by the Treasury in such manner as
the Treasury determines.
5 Requirement to have a nominated officer

(1) A company to which this Act applies must have a nominated officer.
(2) The nominated officer may be —
(a) an individual who is resident in the Island; or
1 XIII p.235 2 c.1 3 c.13 4 c.6 5 c.7
Companies (Beneficial Ownership) Act 2012 Section 6


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(b) the holder of a licence issued under section 7 of the Financial
Services Act 20086 whose licence permits the holder to carry on the
regulated activity (within the meaning of section 3(1) of that Act)
to provide corporate services.
(3) A company may have more than one nominated officer and, if so, their
functions and liabilities under this Act are joint and several.
(4) The nominated officer of an incorporated cell company is also the
nominated officer of each of its incorporated cells.
(5) A company which fails to comply with this section commits an offence.
6 Record of nominated officer

(1) A company must keep a record of the following —
(a) in the case of a nominated officer who is an individual —
(i) the officer’s name;
(ii) the officer’s home address in the Island;
(b) in the case of a nominated officer which has legal personality but
is not an individual —
(i) the officer’s corporate or firm name; and
(ii) the officer’s business address in the Island.
(2) The record of a nominated officer of an incorporated cell company is also
the record of a nominated officer of each of its incorporated cells.
(3) A company must, within one month after the date of the occurrence of —
(a) an appointment of a nominated officer;
(b) a change in a nominated officer; or
(c) a change in the details in its record of a nominated officer,
give notice to the Department of Economic Development of the
appointment or change and of the date on which it occurred.
(4) A notice under subsection (3) is to be in such form, and must be
accompanied by such documents and information, as the Department of
Economic Development requires.
(5) A company which fails to comply with this section commits an offence.3

7 Duty of members

(1) Subsection (2) applies if a member of a company is not the beneficial
owner of the member’s interest in the company.
6 c.8
Section 8 Companies (Beneficial Ownership) Act 2012


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(2) The member must give notice to the company’s nominated officer of the
required details specified in section 8 in respect of each beneficial owner
of that interest.
(3) A notice under subsection (2) must be given —
(a) in the case of a person who is a member of the company at the
time this section comes into operation but who is not the
beneficial owner of the member’s interest in the company at that
time, within 3 months of this section coming into operation;
(b) in the case of a person who becomes a member of the company
after this section comes into operation in circumstances where the
member is not the beneficial owner of the member’s interest in the
company, within 3 months of the person becoming a member of
the company; or
(c) in the case of a member of the company who —
(i) ceases to be the beneficial owner of the member’s interest
in the company after this section comes into operation; but
(ii) retains legal ownership of that interest,
within 3 months of the member ceasing to be the beneficial owner
of such interest.
(4) A member commits an offence if the member, without reasonable
excuse —
(a) fails to comply with subsection (2) or (3); or
(b) makes a statement to the nominated officer which is false,
deceptive or misleading in a material particular.
8 Required details

The “required details
” are —
(a) in respect of a beneficial owner who is an individual —
(i) his or her name;
(ii) his or her usual residential address;
(iii) his or her nationality; and
(iv) his or her date of birth;
(b) in respect of a beneficial owner which has legal personality but is
not an individual —
(i) its name;
(ii) its jurisdiction of formation, incorporation or
establishment;
(iii) its legal form and the law by which it is governed;
(iv) its registered office (or, if it has no registered office, its
principal office);
Companies (Beneficial Ownership) Act 2012 Section 9


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(v) if applicable, the register in which it is entered and its
registration number in that register; and
(c) 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,
details sufficient to identify and describe the class of persons who
are beneficial owners.
9 Other consequences of failure to disclose beneficial ownership

(1) Subsection (2) applies if a nominated officer of a company is of the
opinion that a member, without reasonable excuse —
(a) has failed to comply with section 7(2) or (3); or
(b) has made a statement to the nominated officer which is false,
deceptive or misleading in a material particular.
(2) The nominated officer must give notice to the company of the opinion
mentioned in subsection (1).
(3) On receipt of a notice under subsection (2), the company may —
(a) place such restrictions as it thinks fit on rights attaching to the
member’s interest in the company, including, without
limitation —
(i) any right to transfer the interest;
(ii) any voting rights;
(iii) any right to further shares in respect of shares already
held; and
(iv) any right to payment due in respect of the member’s
interest, whether in respect of capital or otherwise; or
(b) cancel the member’s interest in the company.
(4) A restriction under subsection (3)(a) is removed —
(a) if the company is struck off; or
(b) upon the commencement of the company’s winding up.
(5) A member may apply to the High Court, in accordance with rules of
court, to set aside any restriction or cancellation under subsection (3).
(6) The Court may make such order on such terms and conditions as it
thinks fit.
10 Disclosure of beneficial ownership information by nominated officer

(1) Subsection (2) applies if a nominated officer receives a notice described
in subsections (3) and (4).
Section 10 Companies (Beneficial Ownership) Act 2012


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(2) The nominated officer must disclose, in accordance with the notice, any
information the officer holds in respect of the beneficial ownership of the
company specified or referred to in the notice.
(3) The notice referred to in subsection (1) is a written notice given by —
(a) the Attorney General;
(b) the Chief Constable;
(c) a police officer or customs officer serving, in either case, with the
Financial Crime Unit of the Isle of Man Constabulary;
(d) the Isle of Man Financial Services Authority;4

(e) [Repealed]5

(f) the Assessor of Income Tax;
(g) the Collector of Customs and Excise; or
(h) a person appointed by any of the persons specified in this
subsection for the purpose of giving the notice.
(4) The notice must state —
(a) what information is required;
(b) that the information is required for the purpose of —
(i) a criminal or regulatory investigation which is being or
may be carried out, whether in the Island or elsewhere;
(ii) criminal or regulatory proceedings which have been or
may be initiated, whether in the Island or elsewhere;
(iii) the initiation or bringing to an end of any such
investigation or proceedings; or
(iv) facilitating a determination of whether any such
investigation or proceedings should be initiated or brought
to an end; and
(c) that the person signing the notice is satisfied that the making of
the disclosure is proportionate to what is sought to be achieved by
it.
(5) Nothing in this section prejudices any power to disclose information
which exists apart from this section.
(6) The information that may be disclosed under this section includes
information obtained before this Act came into operation.
(7) A nominated officer commits an offence if the officer, without reasonable
excuse —
(a) fails to comply with subsection (2); or
(b) makes a statement, in response to receiving a notice under this
section, which is false, deceptive or misleading in a material
particular.
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11 Tipping off

(1) A person commits an offence if the person —
(a) knows or suspects that a notice has been issued, or is proposed to
be issued, under section 10 in respect of a company for which the
person is a nominated officer; and
(b) the person discloses to any other person any information or other
matter which may prejudice —
(i) a criminal or regulatory investigation which is being or
may be carried out, whether in the Island or elsewhere,
which is connected with the issue of the notice; or
(ii) criminal or regulatory proceedings which have been or
may be initiated, whether in the Island or elsewhere, which
are connected with the issue of the notice.
(2) Nothing in subsection (1) makes it an offence for an advocate or other
legal adviser to disclose any information or other matter —
(a) to a client of the advocate or adviser (or to a representative of the
client) in connection with the giving of legal advice to the client;
or
(b) to any person —
(i) in contemplation of or in connection with legal
proceedings; and
(ii) for the purpose of those proceedings.
(3) Subsection (2) does not apply in relation to any information or other
matter which is disclosed with a view to furthering any criminal
purpose.
(4) In proceedings against a person for an offence under this section, it is a
defence to prove that the person did not know or suspect that the
disclosure was likely to be prejudicial in the way mentioned in
subsection (1)(b).
12 Privileged information

(1) Nothing in this Act compels the production or divulgence by an
advocate or other legal adviser of an item subject to legal professional
privilege (within the meaning of section 13 of the Police Powers and
Procedures Act 19987), but an advocate or other legal adviser may be
required to give the name and address of any client.
(2) A requirement imposed by or under this Act has effect despite any
obligation as to confidentiality or other restriction on the disclosure of
information imposed by statute, contract or otherwise.
7 c.9
Section 13 Companies (Beneficial Ownership) Act 2012


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(3) Accordingly, the obligation or restriction referred to in subsection (2) is
not contravened if a disclosure is made in accordance with a requirement
imposed by or under this Act.
13 Offences

(1) A person guilty of an offence under this Act is liable —
(a) on conviction on information to a fine;
(b) on summary conviction, to a fine not exceeding £5,000.
(2) Subsection (3) applies if an offence under this Act is committed by a
body corporate and it is proved that an officer of the body authorised,
permitted, participated in, or failed to take all reasonable steps to
prevent, the commission of the offence.
(3) The officer, as well as the body, is guilty of the offence and is liable to the
penalty provided for the offence.
(4) In this section, “office
r” includes —
(a) a director, secretary or other similar officer;
(b) a person purporting to act as a director, secretary or other similar
officer;
(c) if the affairs of the body are managed by its members, a member;
and
(d) if the body has a registered agent (within the meaning of the
Companies Act 20068), the registered agent.
14 Other provisions concerning beneficial ownership

The operation of this Act does not limit or otherwise restrict —
(a) section 102 of the Companies Act 1931 (trusts not to be entered on
the register) or any other statutory provision;
(b) any provision in a company’s articles of association that relieves
the company from recognising —
(i) any interests other than the interests of the members of the
company;
(ii) any trust, express, implied or constructive, in respect of
shares; or
(iii) any beneficial owner of shares.

8 c.13
Companies (Beneficial Ownership) Act 2012 Section 14


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ENDNOTES

Table of Endnote References

1
ADO (remaining sections) 01/09/13 (SD174/13). 2
Printed as (2)(a) in the original Act. 3
A company already incorporated in the Island when section 6 comes into operation
does not commit an offence under section 6 in relation to the notification of
appointment of its first nominated officer if it gives notice to the Department of
Economic Development of the appointment within one month of “the company’s
return date” (within the meaning of section 109 of the Companies Act 1931) which next
occurs following the coming into operation of section 6. (see SD174/13 Art 4.) 4
Para (d) substituted by SD2015/0090 as amended by SD2015/0276. 5
Para (e) repealed by SD2015/0090 as amended by SD2015/0276.