REGISTRY OF FINAL BENEFICIARY AND UPDATE OF BASIC INFORMATION OF COMMERCIAL COMPANIES (PART 2)

Produced by: Wendy Martinez  / Associate Attorney

Las sociedades mercantiles que realicen toda acción u omisión respecto a las declaraciones del Beneficiario Final y/o actualización de información básica incurrirán en infracciones, las cuales pueden ser:

ADMINISTRATIVE RESOURCES AGAINST SANCTIONING RESOLUTIONS

Before sanctioning resolutions, two types of appeals will be filed:

• Review Appeal: Which will be filed with the Registered Owner, within a period of five business days following its notification, stating the reasons, legal reasons and means of proof on which it is based, through the requirements established in the corresponding forms available on the website of the Public Registry. The Registrar Holder has a period of five days to issue the corresponding resolution[1].
• Appeal: Before the NO AGREEMENT, with the resolution of the Appeal for Review, within five business days you may file with the National Registry Directorate, attached the recursive brief, the corresponding means of proof. Having the National Registry Directorate ten business days from the filing to issue the corresponding resolution[2].

CANCELLATION OF THE FINAL BENEFICIARY REGISTRY

Three specific cases are established in which the Final Beneficiary Registration will be canceled[3], being these:

1. The commercial company is extinguished.
2. Two or more commercial companies have merged.
3. The judicial authority so orders it by resolution.

Application of the Law and Regulations to the Nicaraguan reality

Currently, mercantile companies are in a period of adaptation to this norm, we are taking the first steps in this process of ordering and updating, in which the expected inconsistencies, errors, differences in criteria and contradictions come to light, both due to the competent authority (Public Mercantile Registry), as well as by commercial companies, who despite trying to comply with the regulations issued, are in constant conflict to obtain the requirements demanded by the Public Mercantile Registry.

Below is a brief exemplified case on the way in which this process is currently being regulated, the complications in obtaining the required requirements and the criteria of the competent authority.

[1]Article 25, 26 and 27 Regulations for the Operation of the Registry of Final Beneficiary of Mercantile Companies.

[2] Article 28 and 29 Regulations for the Operation of the Registry of Final Beneficiary of Mercantile Companies.

[3] Article 9 Regulations for the Operation of the Registry of Final Beneficiary of Mercantile Companies

• Share Transfers Update:
• As we well know, before Law 1035 and its regulations, the registration of authorization documents for share transfers of commercial companies was not a mandatory requirement. However, now it is a requirement to register the last share transfer carried out by the mercantile company, leaving as an option and for a "more formal and clean detail" the inclusion of the entire share history of the company in the share transfer document, without this causing any type of cost, it is only recommended as a "background" to arrive at the last share transfer.
• The complication of this specific case occurs when the partner of a Nicaraguan company is a foreign legal person and the competent authority requests the documents related to the foreign legal person, such as: Articles of Incorporation, Updated Registry Certification containing the data of registration of said company and updated Certification of the shareholding of the company, which must contain the respective authentication and apostille and its proper translation into Spanish when necessary. Despite the fact that the Public Mercantile Registry ordinarily grants a period of 30 days to obtain the documents mentioned in the previous paragraph, if required, it may be extended up to 30 more days. However, the extension of the term does not mitigate the central problem and that is that in many countries they still maintain the secrecy of the shareholding because they are under the figure of "Anonymous Companies" therefore, obtaining the documents required by Nicaragua is almost impossible. and it represents a setback in the daily routine of mercantile companies.
• Currently, if a commercial company presents the share transfer document for registration without the aforementioned documents, it will be delivered to the interested party under "Suspension" for non-compliance with the Law and not attaching the corresponding documents to demonstrate the share distribution and the Final Beneficiary of the partners. foreign. Faced with this problem, it is oriented that in this type of case, the holder may attach a Notarial Certification of the Minutes of the General Shareholders' Meeting where the Legal Representative of the national entity expresses the reasons why it was not possible to obtain the required information, must contain at least: Denomination or company name, purpose, address, names, surnames and general law of the shareholders, capital stock, shareholding composition and registration data of registration in the country of origin[1].

[1] Circular DNR No 009-2021, second agreement, third paragraph.

This situation has been identified as one of the main delays in the application of the standard. In specific cases, the competent authority has determined to register share transfers until a rFormal resolution of the action that each commercial company must follow for these particular cases (which, according to the training and induction cycles carried out by the Public Registry, is in the process of being prepared). It should be noted that the registration or not of each document in this share transfer registration process will depend on the criteria of each Assistant Registrar, since up to now NO HAY a definite guideline to follow.

Until now, we are still trying to fill the "gaps" that have arisen after the application of this Law and its Regulations and there is no formal and stable criterion by which we can guide ourselves for its full compliance, however, we continue to learn day by day from the hand of the corresponding authority; this with the aim of collaborating with the recommendations of the International Financial Action Task Force (GAFI) and ensuring adequate, accurate and reliable information on each commercial company.