A Beneficial Owner is an individual who can appoint or remove directors, commissioners, managers, supervisors, or auditors of a corporation, has the ability to control the corporation, is entitled to and/or receives benefits from the corporation either directly or indirectly, is the actual owner of the corporation’s funds or shares, and/or meets the criteria outlined in the applicable regulations (Article 1, Paragraph 2 of Presidential Regulation of the Republic of Indonesia Number 13 of 2018 concerning the Implementation of Beneficial Ownership Principles of Corporations in Preventing and Combating Money Laundering and Terrorism Financing (“Presidential Regulation 13 of 2018”)).
According to Article 3 of Presidential Regulation 13 of 2018, every corporation is required to designate at least one Beneficial Owner who meets the criteria corresponding to the type of corporation. The presence of a Beneficial Owner in a Limited Liability Company is intended to provide accurate, up-to-date, and publicly accessible information to prevent and combat money laundering and terrorism financing.
Furthermore, according to Article 4, Paragraph (1) of Presidential Regulation 13 of 2018, the Beneficial Owner of a Limited Liability Company is an individual who meets the following criteria:
- Owns more than 25% (twenty-five percent) of the shares in the limited liability company as specified in the Articles of Association;
- Holds more than 25% (twenty-five percent) of the voting rights in the limited liability company as specified in the Articles of Association;
- Receives more than 25% (twenty-five percent) of the profits or net income of the limited liability company annually;
- Has the authority to appoint, replace, or remove members of the board of directors and board of commissioners;
- Has the authority or power to influence or control the limited liability company without authorization from any party;
- Receives benefits from the limited liability company; and/or
- Is the actual owner of the funds used to acquire shares in the limited liability company.
According to Article 4, Paragraph (2) of Presidential Regulation 13 of 2018, individuals who meet the criteria described in Article 4, Paragraph (1), subparagraphs e to g, are those who do not meet the criteria set forth in subparagraphs a to d.
Moreover, as stipulated in Article 11 of Presidential Regulation 13 of 2018, the corporation determines the Beneficial Owner through:
- The Articles of Association, including amendments to the Articles of Association, and/or the deed of establishment of the corporation;
- Documents related to the establishment of the corporation;
- Documents of general meetings of shareholders (GMS), decisions of foundation meetings, decisions of management meetings, or decisions of member meetings;
- Information from competent authorities;
- Information from private institutions that receive funds or transfers for the purpose of purchasing shares in the limited liability company;
- Information from private institutions that provide or offer benefits from the corporation to the Beneficial Owner;
- Statements from members of the board of directors, members of the board of commissioners, trustees, managers, supervisors, and/or officials/employees of the corporation that can be accounted for;
- Documents held by the corporation or other parties showing that the individual is the actual owner of the funds used to acquire shares in the limited liability company;
- Documents held by the corporation or other parties showing that the individual is the actual owner of funds used for other assets or investments in the corporation; and/or
- Other verifiable information.
Thus, every Limited Liability Company must designate a Beneficial Owner with the aim of obtaining accurate, current, and publicly available information to prevent and combat money laundering and terrorism financing. The application of Beneficial Owner criteria in a Limited Liability Company can be carried out with or without reference to the regulations as previously outlined.