The Companies and Intellectual Property Commission (CIPC) implemented a beneficial ownership register from 01 April 2023 on a voluntary basis. The filing of beneficial ownership filings and securities/beneficial interest registers became mandatory from 24 May 2023 upon promulgation of the Amended Companies Regulations to give full effect to the General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Act 22 of 2022.
In terms of the amended regulations, entities incorporated after promulgation of the amended Companies regulations must file beneficial ownership information within 10 business days after the date of incorporation. The same applies regarding the updating of beneficial ownership records when there are changes.
Pre-existing entities, which had their anniversary date after the promulgation of the amended Companies Regulations, must also file their beneficial ownership information.
The Commission will also be engaging some of the entities to enforce filing of their beneficial ownership information. The Commission will also conduct inspections to verify if the filed beneficial ownership information that is on our records corresponds with records kept by respective entities.
In summary, CIPC has implemented an online Beneficial Ownership Register which will compel any individual who directly or indirectly owns 5% or more of a company, or exercises effective control over it, to register their beneficial ownership through the CIPC.
‘Beneficial Owner’ in respect of a company, means an individual who directly or indirectly, ultimately owns that company or exercise effective control of that company, including through –
- The holding of beneficial interest in the securities of that company;
- The exercise of, or control of the exercise of the voting rights associated with securities of that company;
- The holding of beneficial interests in the securities, or the ability to exercise control, including through a chain of ownership or control, of a holding company of that company;
- The holding of beneficial interests in the securities, or the ability to exercise control, including through a chain of ownership or control, of a holding company of that company;
- The ability to influence the management of that company materially.
Companies will be required to mandate an individual of their choice, by way of a Power of Attorney (this will be provided to you should FHBC be your mandate of choice) to file beneficial information on the company’s behalf to the CIPC. The mandated individual will be required to file:
- the company’s Securities Register;
- certified ID/passport copies (as applicable) of all recognized beneficial owners; and
- a Disclosure form reflecting the hierarchy of entities and other legal forms (including all owners having less than 5% ultimate ownership or control over the company); and
- any other supporting documentation that the CIPC may demand.
FHBC is currently offering its clients the option of lodging the beneficial ownership register on their behalf.
The cost involved in performing these services will be as follows: (This is a once-off fee)
- In the case of a company which is owned by an individual at R450 (excl. VAT);
- In the case of a company with is owned by a trust at R1 150 (excl. VAT)
- In the case of a company where non-RSA resident companies, individuals or trusts are involved at R1 750 (excl. VAT).
It is important to note that CIPC is interested to know whom the natural person behind the company is, who ultimately benefits from the company. In saying this, where the company is:
- owned by a trust, i.e., a trust holds the shares within the company, we need to report who the beneficiaries are of that trust. Should the beneficiaries not be defined in the trust deed by their respective names, and only as a group, then only an organigram needs to be attached to the application indicating that the trust holds the shares within the company.
It is important to note that the onus is on the client to advise FHBC of these changes that need to be implemented for an updated beneficial ownership register to be filed with CIPC and the necessary secretarial documentation to be prepared where applicable.
Should you have any questions or concerns relating to this matter, please feel free to contact Arné Bester at arne@fhbc.co.za.