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Get Compliant from Anywhere, Easy and Fast!

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Get Compliant from Anywhere, Easy and Fast!
beneficial ownership register

Understanding Beneficial Ownership Regulations at CIPC

This article has been updated as of January 30, 2024.

Filing Beneficial Ownership information at CIPC has become mandatory for businesses completing their Annual Returns as of December 11, 2023 (if not previously submitted). This was recently announced with Notice 67 of 2023 by the CIPC, which communicated the latest requirements.

What this Means for You:

Avoid deregistration of your company. Up-to-date Beneficial Ownership information is now a requirement to submit your Annual Returns at the CIPC. This requirement will be phased in across all annual return platforms. Mandatory on April 1, 2024, the aforementioned submission of Beneficial Ownership at CIPC will be required.

What you need to do to ensure you protect your business:

  1. Complete your Beneficial Ownership information.
  2. Once your Beneficial Ownership is complete, you can file your Annual Returns at CIPC.
  3. As soon as your Annual Returns are submitted, your business will be protected against deregistration.

You can find the CIPC Notice 67 of 2023 mentioned above here.

Gain a better understanding of Beneficial Ownership at CIPC in South Africa by proceeding to the article below.

 
 

In March 2023, South Africa was placed on the Financial Action Task Force (FATF)’s “grey list” of countries with strategic deficiencies in their anti-money laundering and counter-terrorist financing (AML/CTF) regimes. This means that the FATF has identified weaknesses in South Africa’s AML/CTF regime that need to be addressed.

The above resulted that on the 29 December 2022, the South African government published the General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Act 22 of 2022 including amendments to the Companies Act 71 of 2008 that came into effect on 1 April 2023.

These amendments include the requirement to keep a register of Beneficial Owners updated at CIPC together with its standard compliance requirements.

 
 
 

What is Beneficial Ownership at the CIPC?

A Beneficial owner in respect of a company, means an individual who, directly or indirectly, ultimately owns that company or exercises effective control of that company.

Here’s an example:

Let’s say John owns 60% of the shares in Company XYZ, giving him a majority vote in company decisions and the power to appoint or remove board members. Additionally, through a chain of ownership involving a holding company, he can influence the management and strategies of Company XYZ. Therefore, John is considered the ‘beneficial owner’ of Company XYZ and his details will be on the Beneficial Ownership Register.

 

Who Are the Beneficial Owners?

beneficial ownership
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Why was Beneficial Ownership Regulations implemented in South Africa?

Before these new regulations, companies were not required to disclose their Beneficial Ownership or shareholding information to entities like the CIPC. These issues were treated as confidential matters and were managed internally by the company through its share register, share holder agreements and the like.

However, in response to these fresh regulations set out by the SA Government, the CIPC has made it clear that they have collaborated closely with various regulatory and law enforcement bodies to establish a system for “gathering Beneficial Ownership information with the aim of cross-referencing this information.” These regulatory and law enforcement entities encompass the South African Revenue Service (SARS), the Financial Intelligence Centre (FIC), and the Financial Sector Conduct Authority (FSCA).

The recent obligation has put companies in the spotlight, forcing them to disclose their Beneficial Ownership to the CIPC. Consequently, the era when individuals with hidden interests in a company could go unnoticed is now over. This has various consequences for anyone holding valuable assets or involved in intricate ownership arrangements. The new regulations empowers government bodies such as SARS to go through your ownership structures with a fine tooth comb and take you to task.

When is the deadline for filing Beneficial Ownership at CIPC?

The deadline for submitting the first round of Beneficial Ownership register with the CIPC was 6 months after the regulation was announced. Companies had little time to finalize their ownership structures and comply with beneficial ownership requirements. 

All companies registered before 24 May 2023 should complete their beneficial ownership register as part of their annual returns filing process. Companies registered on or after 24 May 2023 must complete their beneficial ownership register within 10 days of incorporation.

The CIPC noted that failure to file beneficial ownership information will constitute non-compliance and may result in a court-ordered administrative fine of either 10% of the non-complying company’s turnover or R1 million, whichever amount is greater.

This ads a significant burden on South African Businesses.

Fortunately, our team of specialist can assist to file Beneficial Ownership register with CIPC at minimal cost.

PRICE: R790

TIMEFRAME: 3-days

 

Follow our 3x Easy Steps to complete your Beneficial Ownership

Diagram of beneficial ownership at cipc
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We know compliance can be a hassle, but we’ve got your back! Have more questions about how to navigate these new regulations? Speak to one of our 50 specialists for FREE on 0800 007 269 (Toll-Free)

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Frequently Asked Questions

Beneficial ownership (BO) what is it?

Beneficial ownership goes beyond mere shareholding. It delves into identifying individuals with significant influence or control over a company, even without direct share ownership. It’s about pinpointing the actual individuals steering a business, ensuring operations are transparent and clear.

Learn about beneficial ownership register south africa

 
 
 
 
 
 
 

Beneficial ownership registration plays a pivotal role in preventing money laundering, terrorist financing, and other illicit financial activities. By ensuring transparency in business operations, it becomes harder for individuals to hide behind shell companies or use businesses for illegal purposes.

 

Companies need to provide comprehensive details about individuals with significant control or ownership. This includes their full name, date of birth, nationality, contact details, and the nature of their control or ownership.

 

While the emphasis is on transparency, specific exemptions might apply based on the nature and size of the business. However, most companies, especially those involved in significant financial transactions or international operations, should ensure compliance.

Company Partners is all about demystifying intricate processes. Our seasoned team walks you through the nuances of beneficial ownership, ensuring you’re compliant and well-versed.

what is beneficial ownership in south africa

 
 
 
 
 
 

It’s essential to keep beneficial ownership records current. Companies should update their details whenever there’s a significant change in ownership or control. Regular annual checks are also recommended to ensure accuracy.

 

Company Partners is dedicated to simplifying the beneficial ownership registration process. Our team offers guidance, ensuring that businesses not only comply with regulations but also understand their importance. We’re here to help every step of the way, making compliance straightforward and hassle-free.

 

Any person designated or mandated in writing by a company to file BO information on its behalf. Each filing comes with a unique reference or tracking number.

 

Section 214 of the Companies Act stipulates criminal prosecution for both individuals and juristic entities in cases of reckless conduct, non-compliance with the Act, or providing false statements.

 
 

If your company becomes an “Affected Company,” you’ll need to file your Beneficial Ownership details.

Whenever there are changes to the BO, a company has 10 days to update its BO/securities register, as per Regulation 32(3A) for non-affected companies and Regulation 32A for affected companies.

 
The shareholder’s location or nationality doesn’t exempt them from being a beneficial owner. For non-South African beneficial owners, the CIPC accepts certified passports as valid identification.

The application process for beneficial ownership remains consistent at the CIPC, regardless of the company type.

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