These new regulations have a particular impact on civil (non-trading) companies, which are now subject to the same rules as trading companies, both in terms of obligations and transparency towards the authorities and the public.
At the same time, the new regulations provide for the possibility, and in some cases the obligation, for civil companies to appoint a professional to meet their new obligations, thereby enabling the beneficiaries of these civil structures, who are often non-professionals, to comply with the new requirements.
Law no. 1.549 of 6 July 2023 introduces a new obligation by introducing a "person responsible for the basic information of the legal person" and, if different, a person responsible for information on the beneficial owners.
Under article 22-1 of Law no. 1.362 of 3 August 2009, as amended, commercial companies, economic interest groupings and civil companies are required to appoint as the person responsible for basic information and information on their beneficial owners:
1°) one or more natural persons resident in Monaco chosen from among their partners, shareholders, staff, managers, members or the representatives of their partners, shareholders, managers or members who are legal entities ;
or failing that,
2°) a person referred to in points 6°), 13°), 19°) or 20°) of Article 1 or in points 1°) or 3°) of Article 2 (i.e. a TCSP, legal adviser, MFO, chartered accountant, notary, or avocat-défenseur, lawyer and trainee lawyer).
or failing that,
2°) a person referred to in points 6°), 13°), 19°) or 20°) of Article 1 or in points 1°) or 3°) of Article 2 (i.e. a TCSP, legal adviser, MFO, chartered accountant, notary, or avocat-défenseur, lawyer and trainee lawyer).
Civil companies that do not have a deposit account with a credit institution in Monaco must designate one of the persons referred to in point 2°) above.
Law no. 1.550 of 10 August 2023 and Sovereign Order no. 10.117 of 21 September 2023 amending Sovereign Order (SO) no. 3.573 of 11 May 1966 implementing Law no. 797 of 18 February 1966 relating to civil companies define the "basic information" that civil companies must provide to the Economic Development Department.
In addition, the above-mentioned "basic information" will henceforth appear on the extracts issued by the Special Register for Civil Companies.
According to Article 7 of Law no. 797 on civil companies:
"The basic information is accessible to the public by means of an extract from the special register. The procedures for issuing the extract and the basic information contained therein are determined by Sovereign Order".
According to Article 10 of SO no. 3.573:
“Pursuant to Article 7 of the aforementioned Law no. 797 of 18 February 1966, as amended, the basic information shown on the extract from the special register consists of the following information:
1°) the date of incorporation of the company, its date and number of entry in the register;
2°) its legal form;
3°) its name or corporate name followed, where applicable, by the acronyms used;
4°) its corporate purpose;
5°) its duration;
6°) the address of its registered office and, if applicable, the address of its secondary establishment or ancillary premises in Monaco;
7°) the amount of its share capital;
8°) the closing date of its financial year;
9°) the surname, first names, date and place of birth, nationality(ies) and personal address of each of the persons authorised to administer, direct, manage or bind the company. In the case of legal entities, their name or corporate name, their legal form, the address of their registered office, their number and place of registration in a public register and the full name of its permanent representative;
10°) proof of incorporation of the company consisting of:
2°) its legal form;
3°) its name or corporate name followed, where applicable, by the acronyms used;
4°) its corporate purpose;
5°) its duration;
6°) the address of its registered office and, if applicable, the address of its secondary establishment or ancillary premises in Monaco;
7°) the amount of its share capital;
8°) the closing date of its financial year;
9°) the surname, first names, date and place of birth, nationality(ies) and personal address of each of the persons authorised to administer, direct, manage or bind the company. In the case of legal entities, their name or corporate name, their legal form, the address of their registered office, their number and place of registration in a public register and the full name of its permanent representative;
10°) proof of incorporation of the company consisting of:
a) for non-trading companies other than limited companies: the date of registration of the company's articles of association with the Directorate of Tax Services;
b) for public limited companies: the date of filing at the general registry of the copy of the articles of association and the date of publication of the said articles of association in the Journal de Monaco;
b) for public limited companies: the date of filing at the general registry of the copy of the articles of association and the date of publication of the said articles of association in the Journal de Monaco;
11°) the particulars automatically entered in the register;
12°) the main elements governing the operation of the company; and
13°) the status of the company.”
12°) the main elements governing the operation of the company; and
13°) the status of the company.”
Also, the managers or liquidators of any civil company are required to keep basic information and the corresponding supporting documents for ten years after the date of dissolution or liquidation of the company.
In addition, civil companies must keep a register of their shareholders, indicating their identity. This register must be kept and made available at the company's registered office, or failing that, at one of the persons or bodies referred to above, namely a TCSP, legal adviser, MFO, chartered accountant or certified accountant, notary or avocat-défenseur, lawyer and trainee lawyer. The identity of the person responsible for the register must be communicated to the Economic Development Department. The information in this register must be kept up to date at all times.
Finally, civil companies must confirm each year, in the month following the anniversary date of their entry in the register, that they are pursuing their activity. On this occasion, the company confirms the information provided upon registration or the amendments made in the meantime.
Failure to comply with these new obligations is subject to administrative and criminal penalties, applicable to the offending companies as well to their managers.
- Administrative penalties may range from EUR 20,000 to EUR 2,000,000 and may be imposed if the administration's formal notices to rectify the situation remain unfruitful. If the breach of obligations is attributable to the directors or partners, due to their personal involvement, they are liable to the same administrative penalties.
- Administrative and criminal penalties may be combined.
- Civil companies are liable to criminal penalties, with fines ranging from EUR 18,000 to EUR 90,000, with a tenfold maximum. The company may also be dissolved, banned from practising definitively or for a limited period, confiscated, etc.
- The persons authorised to act on behalf of the company (i.e. the managers, or failing that, the persons responsible for the basic information, the register of beneficial owners and the register of shareholders, as well as the liquidators) are also liable to criminal penalties for breaches of the obligations described above. Penalties may include a fine of between EUR 2,250 and EUR 90,000 and six months' imprisonment.
These new obligations, which apply to all Monegasque entities, can be fulfilled on behalf of civil companies by the responsible agent(s) defined in Law n° 1.362 as amended.
Rosemont has the capacity to act as manager of civil companies, as the person responsible for the basic information of the legal entity, as the person responsible for information on the beneficial owners as well as the person responsible for the shareholders register, and therefore carry out all the formalities introduced by these new legislative amendments, while protecting the beneficial owners.
For more information, please contact consulting@rosemont.mc