BO Reporting: A Comprehensive Overview [Issue 3 of 4]
Non-compliance with Beneficial Ownership (BO) reporting can lead to severe penalties, making it essential for companies to stay vigilant. The complexity of identifying BOs increases in cases involving corporate shareholders, trusts, government entities, or companies in liquidation. Understanding these special considerations helps ensure compliance and avoid costly sanctions.
Penalties for Non-Compliance
Non-compliance with BO reporting obligations can result in significant penalties. In Malaysia, penalties can reach up to RM3 million, and/or imprisonment for up to 10 years. Companies need to establish strong internal controls to avoid these sanctions.
Special Considerations in BO Reporting
- Corporate Shareholders: When companies are owned by other corporations, identifying the ultimate BO can be complex. It requires tracing ownership through multiple layers to uncover the individual with ultimate control.
- Trusts and Nominee Arrangements: If shares are held in trust or by nominees, the person benefiting from the arrangement is considered the BO. Companies must ensure such structures are disclosed and accurately recorded.
- Government-Owned Entities: When government entities are shareholders, the BO may be a senior government official, such as a minister or agency head.
- Companies in Liquidation or Corporate Rescue: When a company is being liquidated or under corporate rescue, the liquidator must update the BO information as necessary.
Stay tune for the upcoming newsletter, we will share with you more on BO Reporting: A Comprehensive Overview.
