Importance of filling of Company Beneficial Ownership at CIPC

Why were 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, shareholder 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 to cross-reference 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 empower 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 adds a significant burden on South African Businesses.

Fortunately, our company can assist in filing a Beneficial Ownership register with CIPC at a minimal cost. Contact us for assistance with this important service for your company.