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:
- Has interest, direct or indirectly, in not less than 20% of the shares;
- Hold, directly or indirectly, not less than 20% of the voting shares of the company;
- Has the right to exercise ultimate effective control whether formal or informal over the company; or the directors or the management of the company;
- 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
- 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:
- Has the right to exercise ultimate effective control whether formal or informal over the company; or the directors or the management of the company;
- Has the right or power to directly or indirectly appoint or remove a director(s); or
- 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:
- Holds directly or indirectly a right to share in not less than 20% for the capital contribution of the limited liability partnership;
- Holds directly or indirectly not less than 20% of the rights to vote in the limited liability partnership;
- 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
- 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:
- Companies licensed by Bank Negara Malaysia under the Financial Services Act 2013 or the Islamic Financial Services Act 2013;
- Prescribed development financial institutions under the Development Financial Institutions Act 2002;
- Licensed money services business under the Money Services Business Act 2011;
- 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);
- Companies whose shares are quoted in a stock exchange, either local or foreign exchange;
- Companies whose shares are deposited in the central depository pursuant to the Securities Industry (Central Depositories) Act 1991; and
- Limited Liabilities Partnership which is registered as (a), (b) or (c) above;
- Sole proprietorship and conventional partnership are deemed the BOs to the business.
PERSONS RESPONSIBLE FOR THE BO INFORMATION
(I) Companies:
- Board of Directors
- Members of the company
- Person who receive notice
- Company secretary
(II) Limited Liability Partnership:
- Partners
- 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.
