In the last quarter of 2014, the Bulgarian Parliament adopted a draft law for implementation of the Fourth Money Laundering Directive (the “Directive”), which, inter alia, provide for the establishment of a central register of the ultimate shareholders. According to the European institutions, the availability of accurate and up-to-date information regarding the ultimate shareholders is a key factor in the disclosure of criminals who might otherwise hide their identity behind a company’s structure.
In the draft law submitted to the Parliament, its authors broadly applied the term "enterprise" (“undertaking” in the English version of the Directive, “enterprise” in the French and “Unternehmen” in the German), determining that not only traders should disclose their ultimate shareholders, but also other organizations such as foundations, associations, political parties. The Bulgarian draft law includes practically any kind of organizations and business entities.
The term "ultimate shareholders” has a legal definition that is different for capital-based companies and other organizations:
- in the case of a capital-based company, an ultimate shareholder shall be the person who directly or indirectly holds a "sufficient percentage" of the shares, stocks or voting rights, whereas a sufficient percentage is 25% of the capital of the respective company;
- for foundations and other organizational forms, such as trusts and other similar foreign legal entities, the persons to be considered for ultimate shareholders are founders, trustees, guardians, beneficiaries, persons whose principal interest is the trust or property, etc. When the criteria for legal definition of an "ultimate shareholder" are exhausted, the latter is considered to be the individual who acts as senior management.
The scope of the definition excludes companies whose shares are traded on a regulated market and which are subject to disclosure requirements in accordance with EU law or equivalent international standards providing an adequate degree of transparency in respect of ownership.
The publication of the information regarding the ultimate shareholders should be made by submitting a declaration to the Commercial Register (for traders) or to the BULSTAT register (for other types of organizations). According to the draft law, the published information should be accessible to a wide range of persons. The access conditions are not clear and will be regulated by secondary legislation.