Voting Rights and Beneficial Ownership Registers

Voting Rights

Voting rights are an essential aspect of corporate governance, outlining the power held by shareholders or members to influence decision-making within a legal entity. The following points highlight key considerations related to voting rights:

Classes of Shares or Interests

• Voting rights are typically set out in a legal entity’s governing documents (e.g., articles of association, partnership agreement, or LLC operating agreement).
• Shares or interests may have different classes with varying rights, including voting rights.
• Some shares or interests may not carry any voting rights or may have limited voting rights.

Calculating Beneficial Ownership

To determine beneficial ownership, a comprehensive analysis of the register of members and governing documents is necessary. The following points outline key considerations:

Excluding Treasury Shares or Interests

1. To determine beneficial ownership, treasury shares or interests (shares or interests bought back by the entity) should not be included in the calculation.
2. This ensures that the calculation accurately reflects the voting rights held by individuals or entities.

Calculating Percentage of Voting Rights

• In the case of LLCs, all interests allocated to members are used to calculate the percentage of LLC interests held by any member.

Control by Other Means

An individual exercising control over an entity is considered a beneficial owner, subject to the 25% threshold. The following points outline key considerations:

Means of Exercising Control

1. An individual can exercise control through various means, including:
   • Holding more than 25% of shares or voting rights
   • Having absolute decision or veto rights
   • Appointing or removing majority directors
   • Exercising significant influence over the entity

Relevant Legal Entities

A legal entity may be owned or controlled by another legal entity. The following points outline key considerations:

Recording RLE Details on Beneficial Ownership Register

1. If a legal entity is a Relevant Legal Entity (RLE), its details must be recorded on the beneficial ownership register.
2. This ensures that accurate and up-to-date information is maintained, enabling effective regulation of voting rights and beneficial ownership.

By understanding these key considerations, regulatory bodies can effectively implement policies to govern voting rights and beneficial ownership registers.