LIBERIA ECONOMIC SUBSTANCE 2020
The Republic of Liberia has amended its Associations Law, Title 5, Liberian Code of Laws Revised on April 6, 2020.
The amendments maintain international standards established by international multi-governmental organizations such as the OECD (Organization for Economic Cooperation and Development) and the FATF (Financial Action Task Force).
Key changes in the Associations Law include:
• Adoption of non-statutory Delaware Corporation and Business Entity Laws;
• Execution of Corporate documents for filing reduced to one officer or an authorized person;
• Acknowledgement of filing documents outside of Liberia without notarization and apostille;
• Acceptance of electronically transmitted corporate documents for filing, as well as, signatures, records and seals that are created, transmitted, signed and stored electronically;
• New definitions of “beneficial owner,” “nominee,” “ultimate effective control,” “ultimate ownership” and public companies;
• A mandatory requirement for all corporate entities to privately record information on the number of directors, management and ownership with the registered agent, The LISCR Trust Company, annually.
The most important procedural changes introduced by the amended Associations Law are:
Disabled bearer shares conversion deadline December 31, 2020
The amended Associations Law confirms the disabled bearer share conversion deadline of December 31, 2020. In practice, all corporations who were previously authorized in their Articles of Incorporation to issue bearer shares, but had their Articles of Incorporation automatically amended by the Registrar, will be required to submit an Attestation to the Registrar, confirming that all disabled bearer shares were either converted to registered shares or forfeited (cancelled) by December 31, 2020. Failure to submit a completed Attestation on or before the deadline will result in the issuance of a non-compliance penalty in the amount of $3,000; therefore, affecting the goodstanding status of the corporation.
Annual Declaration of Shareholding, Beneficial Ownership, Management and Record-keeping of the Corporation to be recorded with the Registered Agent
The amended Associations Law compels the registered agent to mandatorily require entities for which it serves as the registered agent, to annually record information pertaining to directors, management and ownership. To comply with this requirement, the registered agent of all non-resident entities, the LISCR Trust Company, shall require all entities to submit by 31 December, 2021, and annually thereafter, a Declaration detailing the number of shareholders, beneficial owners, directors and officers of the Liberian corporation, as well as, attest to the record-keeping obligation of the corporation and provide a point of contact whom is responsible for keeping the records of the entity.
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