Not long ago, Act No. 37/2021 Coll., on the Registration of Beneficial Owners (the “UBO Act”) became effective and changed the rules for determining and registering the beneficial owners of obliged entities. Now, less than a year and a half later, a wide-ranging amendment to this Act is coming. Obliged entities will have to recheck and possibly amend their existing entries in the Register of Beneficial Owners. The amendment is set to take effect on 1 October 2022.

Let’s take a look at the most important changes:

Change to the definition of the beneficial owner of a corporation

The entire current definition of beneficial owner, which was not in line with the European AML Directive, is being changed. Thus, the amendment no longer distinguishes between a person who is an ultimate recipient or a person who has ultimate influence. Any natural person who ultimately owns or controls the corporation will now be regarded as its beneficial owner. A person will be deemed a beneficial owner if they directly or indirectly (i.e. through another person or legal arrangement):

  • have a share in the corporation or in voting rights of more than 25%;
  • have a right to a share in the profits, other equity or liquidation balance of more than 25%;
  • exercise a decisive influence over the corporation or corporations which individually or collectively have a greater than 25% share in that particular corporation; or
  • exercise decisive influence in the corporation by other means.

If at least one of the above conditions is met, the person will be regarded as the beneficial owner, so it is not necessary to meet more or all of the conditions at the same time.

The rules for determining substitute beneficial owners remain unchanged in principle; they only respond to the changes in the definition of the beneficial owner.

Obliged entities will still be required to disclose and register the entire corporate structure, i.e. the structure from the registering entity up to the beneficial owner (including any intermediate links).

Entities without a beneficial owner

The UBO Act provided for entities that did not have a beneficial owner. This was also not in line with the European AML Directive, for entities were set too broadly.

The amendment narrows the entities that do not have a beneficial owner. For example, churches and religious corporations, trade unions or associations of unit owners will now have to register their beneficial owners.

Extension of the period without suspension of voting rights

The UBO Act contains penalties for failure to make an entry in the Register of Beneficial Owners. The penalty with the greatest practical impact is the suspension of the voting rights. If the beneficial owner has not been duly registered in the Register of Beneficial Owners, they cannot exercise their voting rights at the general meeting.

The only exception was where this beneficial owner status arose in the 15 days prior to the voting of the decision-making body. In such a case, the voting rights were not suspended. However, this period was not long enough for the corporation to be able to register the change of the beneficial owner in the Register of Beneficial Owners in time, which created problems in practice, especially for corporations with foreign shareholders or beneficial owners. The amendment prolongs this period to 30 days.

Transitional provisions

The amendment foresees that an automatic update should take place for most entities by the end of October 2022. Unfortunately, based on our experience with automatic updates especially in more complex cases, either the update did not take place, or the result did not comply with the legislation.

The amendment also provides for a six-month transitional period within which it is necessary to ensure (i) the registration of newly registered entities or (ii) compliance with the amendment by the entities for which the automatic update did not take place or was not in accordance with the amendment. Conversely, entities that have not complied with their obligation to register under the current legislation must ensure compliance without undue delay after the amendment comes into effect (or already have this obligation under the current legislation).


After the amendment becomes effective, we recommend that all corporations (as well as other compulsorily registered entities) check whether the automatic update was duly carried out and whether the entry in the Register of Beneficial Owners complies with the new requirements. Then, if necessary, they should ensure that the entry is corrected.

At the same time, we recommend setting up internal processes to ensure that proper internal records of the beneficial owners are maintained, that changes to the beneficial owners are registered in the Register of Beneficial Owners, and that internal mechanisms are in place to regularly check the identity of the beneficial owner.

If you would like further information or assistance with updating the entries of the beneficial owners of your corporation, please contact your contact person in our office or Jiří Absolon or Martin Jonek.

This document is a general communication and should not be regarded as legal advice on any specific matter.