New fines for failing to report beneficial owners

Article L574-5 of the Monetary and Financial Code, which came into effect on May 28, 2026, introduces fines of up to 200,000 euros for individuals and 1,000,000 euros for companies for failing to properly declare or update information about beneficial owners. This applies to companies and their owners who do not provide accurate details to relevant professionals like banks or lawyers.

Penalties increased significantly

Before May 28, 2026, the maximum penalty for individuals was a fine of 7,500 euros and up to six months in prison. For companies, the fine was 37,500 euros. After the new law, the fines have risen sharply, with individuals now facing 200,000 euros and companies up to 1,000,000 euros, which is five times the individual penalty.

Older violations not subject to new penalties

Acts that occurred before May 28, 2026, are not affected by the new higher fines. The older, less severe penalties still apply, meaning individuals cannot be imprisoned for these acts, and companies cannot be fined the new higher amounts. Legal arguments will determine how these cases are handled individually.

Court can require companies to correct information

The president of the court has the authority to require a company to declare or correct its beneficial owners, possibly with a penalty. If the company fails to comply, it may be removed from the commercial and companies register within three months of the court’s decision. A representative can also be appointed to handle the necessary procedures.

Consequences for companies include exclusion from public contracts

Companies facing penalties may be excluded from public tenders, face judicial oversight, have their operations closed, or lose the ability to issue checks or use payment cards. The most severe consequence, dissolution, is only applied if the company was created specifically to commit illegal acts. Other cases require proof of a serious offense.

Companies must update beneficial owner information promptly

When a company is registered or when changes occur, such as a share transfer or a new associate joining, the beneficial owner information must be updated within thirty days. This ensures that the declaration matches the company’s actual ownership structure. Correcting the information before any legal action can prevent penalties and the removal of the company from the register.

Regularizing requires more than just filling out a form

Updating beneficial owner information involves more than just submitting a form. It requires ensuring that all details align with the company’s statutes, share records, and actual ownership chain. Managers must check that all companies in the group, including civil companies, have properly declared their beneficial owners. This includes verifying past events and ensuring all required information has been collected and submitted.