Are you a public sector partner? Do not forget to register!
In February 2017, the so-called act against shell companies came into force. This introduced the register of public sector partners. From now on, persons acting as public sector partners must be registered.
Mandatory registration applies to all persons who accept financial means or performance from public sources, and to selected persons (such as persons who enter into a contract as the result of a public tender, health care providers, organizations that hold a mining licence) and, in certain cases, their sub-contractors as well.
However, the act sets limits on the persons who have to be registered, so that not all persons, regardless of the financial means or performance accepted, have to register. The duty to register is established if the once-off amount of EUR 100,000 (or EUR 250,000 in total during a calendar year) is exceeded.
The aim of the act against shell companies is to uncover and disclose the property and management structure of persons “who do transactions with the state”. The most important disclosed data is information on persons who benefit from the business activity of these companies (so called ultimate beneficial owners).
The aim of the legislator is that identifying the ultimate beneficial owners should be carried out by so-called authorized persons who have the best overview of the property and management structure of the public sector partner, i.e. those who either suggested and set up the structure or came into contact with it. This means that these persons in particular include attorneys, tax advisors, auditors, banks and notaries.
Authorized persons have a legal duty to identify and confirm the identity of the ultimate beneficial owners on the basis of all available information. In practice, identification will mainly be based on founding documents, excerpts from registers, various agreements on the exercise of rights and distribution of profit, annual financial statements and business reports. This means that the extent of documents and sources of information will always depend on the specific public sector partner. Authorized persons have to act with due care and are not bound by the instructions of the public sector partner.
An application for registration of a public sector partner can only be filed by the abovementioned authorized persons electronically. Žilina District Court manages the registration within the statutory period of five days.
Sanctions for violation of the law are severe. The registrar can impose a fine of up to EUR 100 000 on a public sector partner or member of the statutory body. Apart from a financial sanction, the registrar may also delete a registered public sector partner from the register, which can have a major influence on their business activities.