Tuesday, July 23, 2019

Presumption** of disclosure of beneficial share ownership

Recent posts have considered a number of aspects of the ASIC requirement that the beneficial ownership of shares in a private company be disclosed.
  1. (Stripped) Bare** trust share ownership;
  2. Updating ASIC records – Simple (Simon); and
  3. Relationships of share ownership and the ASIC.
One potential difficulty in relation to ASIC’s requirements in this regard involves situations where the legal owner holds the share on an undisclosed trust for another party or entity.

In this type of situation reading of the relevant ASIC provisions suggests that the company report should disclose the fact that the legal owner holds the share non beneficially.

This said, in a true undisclosed trust situation most advisers will recommend that the ASIC records in fact are completed in a way that shows the legal owner is also the beneficial owner.

If this approach is adopted then full supporting documentation should be retained by the legal owner to rebut the presumption created by the way in which the ASIC records are completed.

** For the trainspotters, ‘presumption’ is a key word from Midnight Oil’s song from 1998, ‘Blot’.