Introduction:
Transparency in business operations is paramount for promoting accountability, preventing financial crimes, and ensuring a fair economic environment. The Nigeria Finance Act 2022 introduces beneficial ownership disclosure requirements to enhance transparency and combat illicit financial activities. In this article, we will delve into the key aspects of beneficial ownership disclosure under the Nigeria Finance Act 2022.
- What is Beneficial Ownership?
Beneficial ownership refers to the individuals who ultimately own or control a legal entity, such as a company or trust, and benefit from its assets. Disclosing beneficial ownership helps reveal the true owners behind complex corporate structures.
- Applicability to Legal Entities:
The Act requires legal entities registered in Nigeria to disclose their beneficial ownership information. This includes companies, partnerships, and trusts operating within the country.
- Disclosure Obligations:
Legal entities are obligated to obtain, maintain, and update accurate beneficial ownership information. The disclosed information includes names, dates of birth, nationalities, addresses, and percentage ownership interests of beneficial owners.
- Central Register of Beneficial Owners:
The Act establishes a Central Register of Beneficial Owners, where beneficial ownership information will be maintained. The register aims to consolidate and centralize this critical information.
- AML/CFT Measures:
Beneficial ownership disclosure aligns with anti-money laundering (AML) and countering the financing of terrorism (CFT) measures. This initiative enhances authorities’ ability to identify and prevent illicit financial activities.
- Enhanced Due Diligence:
The Act mandates enhanced due diligence for businesses engaging with high-risk customers or transactions. This includes conducting thorough checks on beneficial owners.
- Professional Secrecy Exception:
Legal professionals, such as lawyers and accountants, are typically bound by professional secrecy. However, the Act requires that they disclose beneficial ownership information if it’s relevant to AML/CFT efforts.
- Implications for Businesses:
Businesses should be prepared to collect and maintain accurate beneficial ownership information. Compliance with these requirements ensures transparency and demonstrates commitment to preventing financial crimes.
Conclusion:
The introduction of beneficial ownership disclosure requirements in the Nigeria Finance Act 2022 signifies the government’s dedication to transparency and combating financial crimes. By unveiling the individuals who ultimately own or control legal entities, the Act aims to deter money laundering, fraud, and other illicit activities.
As a trusted accounting firm, we advise businesses to understand and adhere to the beneficial ownership disclosure obligations. Maintaining accurate records, collaborating with the Central Register of Beneficial Owners, and conducting enhanced due diligence contribute to a fair, transparent, and secure business environment in Nigeria. By complying with these provisions, businesses not only meet legal requirements but also contribute to the broader effort of safeguarding the country’s financial integrity.
For professional advice on Accountancy, Transfer Pricing, Tax, Assurance, Outsourcing, online accounting support, Company Registration, and CAC matters, please contact Sunmola David & CO (Chartered Accountants & Tax Practitioners) at Lagos, Ogun state Nigeria offices, www.sunmoladavid.com . You can also reach us via WhatsApp at +2348038460036.
