CIPC has changed the rules. Conform or pay the consequences.

For a variety of reasons, it is typical for people to disregard the change that is occurring around them. However, it is frequently more stressful to delay acting than to accept the change right away. Good leaders understand this and can efficiently adapt to changing circumstances. Good leaders also know when to delegate responsibility and seek the support of qualified assistance when needed.

What has changed?

The Companies and Intellectual Property Commission (CIPC) recently announced a new mandate requiring companies to file and update Beneficial Ownership information.

To whom does it apply?

  • Anyone with more than 5% beneficial ownership of a company or close corporation must submit (file) with the CIPC, the requisite information.
    • Defining beneficial ownership/effective control:
    • Ownership: You own an interest in a company.
    • Control: You hold significant decision-making responsibility
  • State-owned companies (SOC), unless exempted by the Minister under section 9(2) of the Companies Act
  • Companies listed on the JSE.
  • Non-Profit Organisations.

https://www.cipc.co.za/wp-content/uploads/2023/05/Beneficial-Owner-Filing-Requirements-Guidance-Notice-25_May-2023.pdf

The prescribed requirements differ for the various categories of company. Business Services.Com can assist you in ensuring you comply.

Why have legislators and regulatory bodies implemented this?

The global financial crime watchdogs the Financial Action Task Force; earlier this year placed South Africa on a “Grey List,” -which means that South Africa is under increased scrutiny by the international community.

The FATF identified deficiencies that our country needs to address. Authorities lack timely access to accurate and up-to-date information during their investigations about who the ultimate owners or controllers of an entity are. Legal persons are vehicles prone to abuse for money laundering, terrorist financing, tax evasion and corruption.

Legislators and regulatory bodies have implemented the change; to boost transparency and curb money laundering.

What are the consequences of Non-Compliance consequences?

Noncompliance constitutes an offense under the Companies Act. A notice may be issued in the case of noncompliance and an administrative penalty may result as well.

Due date – October 2023 and, whenever there are changes in beneficial ownership, a company must update its Beneficial Ownership Register within 10 days of the change.

Business Services.Com; we are here to help you when the financial and legal jargon is too much!

Our team of knowledgeable and experienced bookkeepers and accountants are available to explain the changes to the regulations. We will guide you in gathering the required documents and check their accuracy and completeness so that your submission to CIPC goes smoothly.

We remain committed to adding value to your business and ensuring your business complies with its obligations.