Who is a beneficial owner, and how are they identified?

Can a company be a beneficial owner?

The Act on the Register of Public Sector Partners has no independent beneficial owner definition. It refers to Act No. 297/2008 Coll. on preventing the laundering of proceeds of crime. Section 6a(1) defines a beneficial owner as every individual who actually controls a legal entity, entrepreneur or asset arrangement, and every individual for whose benefit those entities conduct their activities or transactions.

Understand this before drawing an ownership chart: the search is always for a person. If another company is a member of your s. r. o., that company is not the beneficial owner. Trace through it until individuals are reached. That is why multi-layer structures require an investigation, rather than just an extract.

What criteria identify a beneficial owner?

For legal entities, the Act lists who is included in particular. These are examples, rather than an exhaustive list. A beneficial owner is an individual who:

1. Has a direct or indirect interest, or their combined total, of at least 25% in voting rights or registered capital, including bearer shares.
2. Has the right to appoint, otherwise install or remove a statutory, management, supervisory or control body, or any of its members.
3. Controls the legal entity by other means.
4. Is entitled to at least 25% of the economic benefit from the entity’s business or other activity.

The third criterion is often underestimated. Control by other means can cover a members’ agreement giving a minority member a veto, actual dependence on a sole creditor or a silent partner. Percentages are only the most visible criterion. A registration based solely on a table of interests may not withstand scrutiny.

Acting in concert and special legal forms

A beneficial owner also includes an individual who does not meet the criteria alone but does so together with another person acting in concert or jointly (Section 6a(3)). Four members with 20% each are therefore not automatically excluded; how they make decisions matters.

Special rules apply to other forms. For general and limited partnerships, every partner is a beneficial owner, or the person controlling a corporate partner. For a silent partnership, it is an individual entitled to at least 25% of the economic benefit. For asset arrangements and foreign trusts, the Act lists the settlor, trustee or administrator, supervisor and beneficiaries. Foreign trusts in an ownership structure therefore always signal a more demanding investigation. We address them through holding structures.

What if nobody meets the criteria?

If no individual meets the criteria under point (a), senior management, meaning the statutory body or its members, is treated as the beneficial owner (Section 6a(2)). This provision cannot be used merely because the structure is hard to uncover. It applies only after it is established that nobody actually meets the criteria. For RPVS registration, this must also be specifically demonstrated in the documentation; a bare assertion is insufficient.

Why this matters for RPVS

For registration in the Register of Public Sector Partners, an authorised person, a lawyer, notary, bank, auditor or tax adviser, identifies and verifies beneficial owners and bears responsibility for doing so. Incorrect or incomplete information leads to fines for the company and its statutory representative and may result in deletion. Identification is also repeated at each calendar year-end and on other statutory events.

We can handle beneficial owner identification and the entire registration through RPVS registration and authorised-person services. Uncertainty about whether your ownership structure gives a clear answer is itself a reason to review it with a lawyer before anything is registered.