ED04 - Transparency Register at Incorporation: Beneficial Owners, Pre-incorporation Company, Fictitious Beneficial Owners

Problem

The incorporation of a corporation gives rise to obligations that do not follow from the commercial register and that many founders overlook: the transparency obligations under the Money Laundering Act (GwG). Since the Transparency Register and Financial Information Act (TraFinG), the transparency register has been a full register - the former "notification fiction" (information is deemed to have been notified if it appears in the commercial register) has been abolished without replacement since 01.08.2021.

The typical mistakes in the incorporation phase:

• "It's all in the commercial register anyway" - the notification fiction no longer exists; every company must actively report (§ 20 Abs. 1 GwG)
• Overlooking the pre-incorporation company - the company in formation (i. Gr.) is already subject to the reporting obligation; the initial report is omitted if the application for entry in the commercial register is filed within three months of the articles of association - otherwise a report must be made
• Cascades not traced through - if a holding holds the shares, it is not sufficient to name the holding; the natural person behind the chain must be identified
• Fictitious beneficial owners not recognized - if the shareholders are themselves corporations and no natural person can be identified, the legal representatives are deemed to be the beneficial owners - this fiction must be reported with an explicit justification

Core Message

The transparency register obligations are incorporation obligations - they arise with the articles of association, not with the first revenue:

1. Subject to the reporting obligation are all legal entities under private law (GmbH, UG, AG, SE, KGaA, registered associations, cooperatives, foundations with legal capacity) and registered partnerships (OHG, KG, PartG, from 01.01.2024 also eGbR) - §§ 20, 21 GwG. Not subject to the reporting obligation: sole proprietorships, e. K., and the (unregistered) GbR.
2. Beneficial owners (wB) are exclusively natural persons who directly or indirectly hold more than 25 % of the capital shares, control more than 25 % of the voting rights, or exercise control in a comparable manner (§ 3 Abs. 2 GwG) - for example as a general partner or through veto rights with a structuring character.
3. Indirect beneficial ownership: If a corporation holds the shares, the wB is whoever controls the parent entity - as a rule, from more than 50 % of the capital shares or voting rights at each level of the chain (§ 3 Abs. 2 S. 2-4 GwG i. V. m. § 290 HGB).
4. Fictitious wB: If, even after a comprehensive, documented review, no natural person can be identified, the legal representatives (managing directors, managing shareholders) are deemed to be the beneficial owners (§ 3 Abs. 2 S. 5 GwG) - with the justification of the fiction in the report.
5. Pre-incorporation company (i. Gr.): The active pre-incorporation company is also subject to accounting and tax obligations - and thus to transparency obligations. Initially reported as "other legal arrangement" with the addition "i. Gr."; the notification is dispensable if the application for entry in the commercial register is filed within three months of the articles of association. After the entry, the commercial register number is subsequently submitted as an amendment report.
6. Content of the report (§ 19 Abs. 1 GwG): first name and surname, date of birth, place of residence, all nationalities, type and extent of the economic interest, and the validity date.

Compliance by Design: Identifying the wB is not a form-filling exercise but a documented identification process - from the articles of association via the list of shareholders to the cascade analysis. It is precisely this process that belongs in the Git repo: as a JSON artifact with V7GUID, sidecar, and SHA-256 references to the source documents. The identification in ED04 is the basis for the GoBD-compliant documentation (ED12) and for carrying out the report (ED17, ED18).

The Cascade by Way of Example

E1 is an entrepreneur and sole shareholder. The group is structured as a cascade - a typical holding case:

Identification for ORG-1 (the gUG):

1. Direct? The shareholder is ORG-5 (GmbH) - a corporation, not a natural person. No direct wB.
2. Indirect? Who controls ORG-5? E1 holds 100 % of ORG-5 - that is more than 50 %, i.e. controlling influence. E1 is therefore the indirect beneficial owner (wB) of ORG-1: type of interest "indirect control via ORG-5", extent "100 % of ORG-5".
3. Report: ORG-1 reports E1 as indirect wB - stating the chain (ORG-1 ← ORG-5 ← E1).

Identification for ORG-5 itself (the holding):

1. Direct shareholder: E1, natural person, 100 % → E1 is the direct wB of ORG-5 (extent: 100 % of the capital shares).

Important: Every company in the chain performs its own identification and its own report - even if in the end the same natural person (E1) results for all of them. The obligation applies to the entity, not the person.

Fictitious Beneficial Owners: the "Virtual" Beneficial Owners

The most common misunderstanding in practice: if the shareholders are corporations and no natural person with > 25 % can be identified, the managing director is deemed to be the wB - not "nobody":

• If several persons are legal representatives, all of them must be reported.
• The fiction must be justified (no wB identifiable despite a comprehensive review / ownership and control structure not fully traceable).
• If the GF (managing director) changes, the fictitious wB changes with it - the change must be reported without undue delay. Anyone who does not understand the fiction systematically overlooks this obligation (ED18).

Git-native view: The fiction is not an edge case but the normal case of group structures. In the Git repo, the fiction is a classified artifact: wb_fiktion.json with justification, review date, reviewed chain, and SHA-256 references to the list of shareholders and the articles of association. If the review later turns out differently (e.g., new shareholders), the artifact is not modified but replaced by a new one - obsolescence tracking (superseded_by) shows which fiction applied when, and why.

Timeline of the Incorporation Obligations

Deadline trap: "Unverzüglich" (§ 121 BGB) means without culpable delay - anyone who waits for the entry in the commercial register and only reports afterwards does not, in the view of the Federal Office of Administration, regularly act without undue delay. The GitCover approach: the trigger (articles of association, commercial register entry, share deal) automatically creates a journal entry with an obligations checklist - the deadline is visible in the repo before it is at risk.

What Ends Up in the Git Repo

Legal notice: Shareholders and wB themselves have an information obligation towards the company (§ 20 Abs. 3 GwG): they must provide the information required for the report and notify any change without undue delay. In the group, this means: E1 provides his information to every ORG-n - every company documents receipt as an artifact.

Risk Leverage

Sanctions (Overview)

• Violations of the transparency obligations are administrative offences (§ 56 Abs. 1 S. 1 Nr. 54-66 GwG): fines of up to 150,000 EUR, in serious, systematic, or repeated cases up to 1 million EUR (in some cases even beyond that).
• Fine notices may be published by the supervisory authority - an additional reputational risk.
• Details, discrepancy procedures, and fine practice: ED18.

Harness Requirement (Preview)

The complete list of requirements in Harness-Anforderungen.md.

Sources

• Money Laundering Act (GwG): § 3 (beneficial owners), § 19 (information), § 20 (reporting obligations, pre-incorporation companies), § 21 (trusts, foundations), § 23a (discrepancy reports), § 56 (fines)
• Transparency Register and Financial Information Act (TraFinG) - abolition of the notification fiction as of 01.08.2021 (full register)
• Federal Office of Administration: information sheet on the notification obligation for beneficial owners (as of 01/2025) - www.transparenzregister.de
• MoPeG (reform of the law of partnerships) - eGbR in the register of partnerships as of 01.01.2024
• § 290 HGB (controlling influence) i. V. m. § 3 Abs. 2 S. 2-4 GwG

Source Topology and CDN Reference Links

Note: This assignment of sources, mirror, and community hub reflects the current state and may change. Please check the respective canonical source on gitcover.org for the current state.