The recent grey listing of South Africa by the Financial Action Task Force for not fully complying with the relevant international standards has resulted in the amendments of certain acts and regulations pertaining to Companies and Close Corporations. This has resulted in additional obligations and compliance requirements on the Directors of Companies and members of Close Corporations.
Below is a brief summary of the most significant matters for your consideration:
Beneficial Owner
Beneficial owner in respect of a company, means an individual who, directly or indirectly ultimately owns that company or exercises effective control over that company.
Beneficial Ownership Register
The CIPC has implemented a Beneficial Ownership Register which requires that all individuals who directly or indirectly owns 5% of more of a Company’s securities, or exercises effective control over it, to register their beneficial ownership with the CIPC.
This register will not be available to the public but will be shared with enforcement agencies as part of the effort to combat money laundering and terrorism financing in South Africa.
Information required for submission to the Beneficial Ownership Register
An original mandate authorising the filer to file the return on behalf of the company,
Securities register of the company
Beneficial interest register of the Company,
Certified ID/Passport copies of all individuals recognised as beneficial owners,
A Disclosure form reflecting the hierarchy of entities and other legal forms,
Any other supporting documentation that the CIPC may request.
Filing of Beneficial Ownership Register
Guidance Note 2 of 2023 allows companies a grace period until 30 September 2023 to file their Beneficial ownership Register, whereafter annual filing of the company’s beneficial ownership must be done in accordance with a company’s Annual Return anniversary date.
Any changes to beneficial ownership of a company must be filed with the CIPC within 10 days of any such change.
All new companies registered after 24 May 2023 have to file their beneficial ownership information with the CIPC within 10 days of their incorporation.
Failure to file beneficial ownership information with the CIPC will constitute non-compliance with the Companies Act and may result in a court-ordered fine of 10% of the company’s turnover or R 1 million, whichever is the greatest.
Responsibility for the filing of the Beneficial Ownership Register
The Directors of the company are responsible for the filing of the Beneficial ownership information with the CIPC.
The Directors may appoint an agent to lodge this information with the CIPC on their behalf by providing them with a written mandate.
Lodging with CIPC
We, as your Auditors / Accountants will lodge the Beneficial Interest information of your company with the CIPC on your behalf, provided that we receive a signed mandate from you.
Any information required by us to complete the beneficial interest register will have to be provided to us by the company’s directors. It is therefore essential that you provide us with all information and documentation regarding any changes to beneficiaries, representatives, and other officers of the beneficial owners of the company.
We remind you that the ultimate responsibility for compliance with the Companies Act remains with the company and its directors. We can therefore not be held responsible for any incorrect information provided to the CIPC as we rely on the Company and its directors to provide us with all relevant information to be lodged.
Cost for submission of beneficial interest information
Due to the nature of the Beneficial Interest Information to be presented to the CIPC and the additional time to be spent to ensure that all documentation is available before the submission thereof, we have to charge an additional fee for this service.
Our fee for the preparation and submission of all the relevant information to CIPC will be charged on a sliding scale determined by the number of beneficial owners. Please refer to the table below.
Description
Fee (exclusive of VAT)
Companies with 1 to 5 beneficial owners
R 2,500
Companies with 6 to 10 beneficial owners
R 4,000
Companies with 10 to 20 beneficial owners
R 6,000
Each subsequent amendment of the beneficial information will be charged at a pre-determined rate for such transactions, again based on the complexity of the change in the shareholding.
Mandate
Attached to this document please find the mandate, to authorise Moore Pretoria to lodge the beneficial ownership information on your behalf.
If you do not wish to make use of our services for the filing of the beneficial interest information of the company, please inform us accordingly.
