WHO ARE BOs? 

Beneficial owners are the natural persons who ULTIMATELY own or control a legal entity.

The legal entity shall include companies incorporated under the Companies Act 1965 or 2016 and Limited Liabilities Partnership (LLP).

OBJECTIVE FOR THE DISCLOSURE: 

  • To maintain a record of the beneficial owners and to promote the transparency of the ownership of the companies.
  • To prevent any fraud (insider trading) and anti-money laundering and counter-terrorism financing.

 

CRITERIA OF BO

A. Companies limited by shares:

Anyone who meets one or more of the following:

  1. Has interest, direct or indirectly, in not less than 20% of the shares;
  2. Hold, directly or indirectly, not less than 20% of the voting shares of the company;
  3. Has the right to exercise ultimate effective control whether formal or informal over the company; or the directors or the management of the company;
  4. Has the right or power to directly or indirectly appoint or remove a director(s) who hold a majority of the voting rights at meeting of directors; or
  5. Is a member of the company and, under an agreement with another member of the company, controls alone a majority of the voting right in the company.

B. Companies limited by guarantee:

Anyone who meets one or more of the following:

  1. Has the right to exercise ultimate effective control whether formal or informal over the company; or the directors or the management of the company;
  2. Has the right or power to directly or indirectly appoint or remove a director(s); or
  3. Has the right to exercise, or actually exercises ultimate effective control over the company.

 

C. Limited Liabilities Partnership (LLP):

Anyone who meets one or more of the following:

  1. Holds directly or indirectly a right to share in not less than 20% for the capital contribution of the limited liability partnership;
  2. Holds directly or indirectly not less than 20% of the rights to vote in the limited liability partnership;
  3. Has the right to exercise ultimate effective control whether formal or informal over the limited liability partnership; or the partners of the limited liability partnership; or
  4. Holds, directly or indirectly, the right to appoint or remove the majority of those involved in the management.

 

ENTITIES WHICH ARE EXEMPTED FROM THE BO REPORTING FRAMEWORK:

  1. Companies licensed by Bank Negara Malaysia under the Financial Services Act 2013 or the Islamic Financial Services Act 2013;
  2. Prescribed development financial institutions under the Development Financial Institutions Act 2002;
  3. Licensed money services business under the Money Services Business Act 2011;
  4. Entities licensed or registered under the Capital Markets and Services Act 2007 (Stock exchange, derivatives exchange, clearing house and central depository, Private retirement scheme administrator);
  5. Companies whose shares are quoted in a stock exchange, either local or foreign exchange;
  6. Companies whose shares are deposited in the central depository pursuant to the Securities Industry (Central Depositories) Act 1991; and
  7. Limited Liabilities Partnership which is registered as (a), (b) or (c) above;
  8. Sole proprietorship and conventional partnership are deemed the BOs to the business.

 

PERSONS RESPONSIBLE FOR THE BO INFORMATION

(I)  Companies:

  1. Board of Directors
  2. Members of the company
  3. Person who receive notice
  4. Company secretary

(II) Limited Liability Partnership:

  1. Partners
  2. Compliance officer

 

PENALTY FOR NON COMPLIANCE:

(I)  Companies :

  • Non compliance – fine not exceeding RM50,000 or a maximum three-year jail term or both;
  • Providing misleading or false information – maximum 10-year jail term or a maximum RM3 million fine or both.

(II)  Limited Liabilities Partnership (LLP):

  • Failure to maintain Register of Beneficial Owners – fine not exceeding RM10,000 and, in the case of a continuing offence, to a further fine not exceeding RM500 for each day during which the offence continues after conviction;
  • Providing misleading or false information – maximum 5 years jail term or a fine not less than RM150,000 and not more than RM500,000 or to both.