Significant Beneficial Ownership - Practical Difficulties In Filing The Relevant Forms

In today's business environment, businesses are operated through complex ownership structure that can conceal the identity of their ultimate beneficial owners. This lack of transparency creates opportunities for money laundering, tax evasion and other illicit financial activities. However, it is pertinent to note that group companies are not always formed with malicious intent. In many cases, such structures are created to diversify business operations across different activities. For instance, when a company is incorporated, only three activity codes can be specified in the incorporation form (SPICE+ Part A form). As a result, if an entity intends to engage in additional, unrelated business activities, it may choose to form a separate legal entity, even though the ownership of both entities remains the same.