With the Transparency Register and Financial Information Act (TraFinG), the transparency register has become a full register.
Previously, it was not necessary to enter certain information in the transparency register if it resulted from other registers. For example, it was not necessary to enter the beneficial owner of a limited liability company (GmbH) if this was derived from the list of shareholders filed in the commercial register. In principle, the beneficial owner is any natural person who directly or indirectly holds more than 25 per cent of the capital shares or voting rights of a company or exercises control over the company in question in a comparable manner.
And in the event that there was no beneficial owner, it was not necessary to enter the board of directors or the management in the transparency register as so-called fictitious beneficial owners.
This has changed. All companies and associations, irrespective of their legal form, must now enter all information in the transparency register that previously did not have to be reported because it could be taken from other registers, such as the commercial register.
This applies above all, but not exclusively, to companies in which the members of the board of directors or management are deemed to be fictitious beneficial owners. Furthermore, limited liability companies that have a beneficial owner must now add this person to the register. It should also be noted that whenever there is a change in the composition of the board of directors or management or in the data subject to registration (e.g. place of residence or surname), the entry in the transparency register must be updated.
In doing so, the updating of the corresponding entries in the commercial register should not be forgotten. Many transactions, such as a change in the personnel of the board of directors or management, or even just a change in the place of residence of a member of the board of directors or management, now entail an obligation to update both the transparency register and the commercial register.
Listed companies (i.e. listed on an organised market) and their subsidiaries are now also subject to reporting requirements. The previous exception, according to which listed companies were always deemed to have fulfilled the obligation to notify the transparency register, has been deleted without replacement.
The following transitional periods apply to companies or associations that have become subject to the reporting obligation as a result of the amendment to the law, within which the notifications that were not previously required must be made subsequently:
|Legal form||Expiry of the transitional period|
|AG, SE, KGaA||31 March 2022|
|GmbH, cooperative, European cooperative, partnership||30 June 2022|
|In all other cases (in particular foundations, registered private companies)||31 December 2022|
Failure to comply with the reporting obligation may result in fines.
Companies and associations newly established as of the date of entry into force of the TraFinG do not benefit from the transitional provisions. They must report their data to the Transparency Register immediately after establishment.
This change in the law will lead to an increased administrative burden for many companies. On the other hand, the transparency register will now be much more informative. Until now, it has been very time-consuming, especially for limited liability companies, to determine the beneficial owner from the entries in other registers.