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Identifying and Verifying the Identity of Beneficial Owners – Case Studies

When identifying beneficial owners, complex issues may arise in individual cases. However, even in standard cases, the reporting legal entity should be given a simple guide to identifying and verifying beneficial owners.

An extensive collection of examples has been created based on inquiries to the registry authority and is continuously being expanded with current case examples.  

You can directly access the collection of examples here. An English translation of the collection of examples is also available under the link here.

This collection of examples is supplemented by the Federal Minister of Finance’s decree on identifying, verifying the identity and reporting beneficial owners pursuant to the Beneficial Owner Register Act (BORA). 

Procedure for identifying and verifying the identities of the beneficial owners of companies 

The beneficial owners of companies (Article 1 para. 2 nos. 1 to 11, 13 and 14 BORA) include all natural persons who either directly or indirectly hold a sufficient percentage of the shares or voting rights (including those held in the form of bearer shareholdings), who hold a sufficient participation in the company (including in the form of cooperative shares or a capital share), or who exercise control over the company. A distinction is made between direct and indirect beneficial owners. 

Direct beneficial ownership exists when a natural person holds more than 25% of the shares or voting rights of a company or a participation of more than 25% in the company or one or more natural persons jointly exercise direct control over the company.

Indirect ownership exists when a legal entity holds more than 25% of the shares or voting rights of a company or a participation of more than 25% in the company and one or more natural persons jointly exercise direct or indirect control over this legal entity. 

In general, the direct beneficial owners of companies can be identified and their identities can be verified by inspecting public registers and non-public documents. 

To identify and verify the identities of indirect beneficial owners, it is necessary to obtain relevant country-specific proofs regarding the beneficial owner or the ownership and control structure. Based on these documents and information, it is advisable to create a graphic depiction of the structure up to the beneficial owner in the form of a complete organisational chart indicating the percentages of shares or participations and the control or voting rights, in order to better understand the complex ownership and control structure. Before reporting, legal professionals can access an extended excerpt in the Register, which contains an electronically generated depiction of the relevant domestic participation structure and a pre-calculation of the beneficial owners. 

However, only the direct and indirect beneficial owners and the relevant ultimate legal entities must be reported to the Register. The intermediate levels need not be reported. 

For beneficial owners of a legal entity with their main place of residence in Austria, it is sufficient to report the first and last names and birth dates. No additional documents are necessary to prove identity. In this case, the report is automatically compared to the Central Residence Register to ensure that only natural persons who actually exist are reported to the Register. 

If beneficial owners have no reported main place of residence in Austria, it is necessary to provide the address of their place of residence and their nationality, in addition to the first and last names and the dates of birth. To prove identity, it is necessary to upload a copy of an official photo ID and indicate the number and type of official photo ID

The nature and scope of the beneficial interest (e.g. ownership, control, voting rights, etc.) must always be specified for all beneficial owners. 

If, after exhausting all possibilities, no natural person can be identified as a beneficial owner, the legal entity must report the natural persons at the top level of company management to the Register as subsidiary beneficial owners. The term “top level of management” always means the top operational level of management of the reportable legal entity (i.e. its senior management). 

A “trust” within the meaning of the BORA is a legal form created by a person (the Settlor/Trustor) by means of a legal transaction among living persons or by means of a testamentary disposition in which assets are entrusted to a trustee for the benefit of a beneficiary or for a specific purpose, whereby the trust itself may also be legally responsible (Article 1 para. 3 BORA). 

A trust or an arrangement of a similar nature to a trust (the functions and structure of which are comparable to a trust) is a reportable legal entity if it is managed from Austria.  

For a trust or an arrangement of a similar nature to a trust to make a report to the Register, it is necessary for the trust or arrangement of a similar nature to a trust to be entered in the Supplementary Register for Others. 

Disclosure of Trusteeships 

Every legal entity must report the nature and scope of the beneficial interest for every beneficial owner, which includes information on whether a trusteeship relationship exists. Therefore, for every beneficial owner it must be specified whether there is a relevant trusteeship relationship (Yes/No). If this is the case, it must be specified whether the beneficial owner is the trustor or the trustee.

Therefore, the legal entity should verifiably ask its legal and beneficial owners or the relevant higher-level legal entities whether there are trusteeship agreements that are relevant to determining beneficial ownership.