Beneficial Ownership: User Guide

Beneficial Ownership: User Guide

• 31 May 2023
• Accounting
• South African Accounting Academy

The CIPC is to keep a register of beneficial ownership (BO) for companies and close corporations. The register to be kept is for the applicable companies and close corporations to submit any beneficial ownership information relating to that entity. Anyone with more than 5% beneficial ownership of a company or close corporation must submit (file) with the CIPC, the requisite information.  

The user guide sets out the 20 Steps to capture Beneficial Ownership details with screenshots, as well as Explanatory Notes and Legislative Requirements.

Some noteworthy explanatory notes are e.g.:

• It is accepted that the filer responsible for filing beneficial ownership information of any applicable entity, has been mandated in writing by the company or close corporation, to tend to same on behalf of the entity. This written and signed mandate, received by the filer, also forms part of the supporting documentation that must be uploaded to the Commission, upon filing of the BO-information. It is accepted that the filer has been provided with the full information required to tend to the BO-filing on behalf of the entity, and the agreement above relates to the filer confirming that he/she is attending to the instructions of the entity on whose behalf they are filing
• ID verified means that the South African ID number submitted has been verified against the Department of Home Affairs database. For foreign beneficial owners, a certified passport copy must be uploaded for the purpose of verification. (See certification guidelines available on the CIPC website).
• Request for “date of issue” of an ID book / card / passport is another layer of verification and validation to ensure that the identification type being inserted is valid.

This user guide is referred to in Guidance Note 2 of 2023, which has been issued in terms of Regulation 4(1)(a) of the Companies Act Regulations, 71 of 2008, which provides that a Regulatory Agency may issue a guidance document with respect to a matter within its authority, which provides for recommended procedures, standards or forms advising on best practice.

Click here to download the User Guidelines:

https://www.cipc.co.za/wp-content/uploads/2023/05/USER-GUIDELINES-BO-LEGISLATIVE-REQUIREMENTS.pdf

Relevance to Auditors, Independent Reviewers & Accountants:

• The Companies Act and Regulations is yet another piece of legislation that your clients must comply with, and which you must assess compliance with.  If they don’t comply with the relevant laws and regulations, you have certain reporting obligations in terms of NOCLAR (NOn-Compliance with Laws And Regulations) – this could include reporting to management, qualifying your audit opinion, reporting a Reportable Irregularity, etc.
• As an auditor, independent reviewer and accountant, you also need to monitor your client’s compliance with the Companies Act and all relevant notices/enforcements/practice notes/customer letters issued by CIPC as the regulator.
• Where you perform these compliance tasks on behalf of your client, you need to ensure that you comply with all relevant notices/enforcements/practice notes/customer letters issued by CIPC as the regulator – especially with regards to additional information that you may need to collect from your clients, e.g. mandate letters.
• Your clients will also have to comply with the resultant General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Act regarding anti-money laundering measures to be taken.
• As an auditor, independent reviewer and accountant you need to consider the impact of the Companies Act Regulations on your service offerings, as well as on your client’s beneficial ownership filing obligations.

Relevance to Your clients:

• An entity (company or close corporation) has a duty to comply with the Companies Act, and all relevant notices/enforcements/practice notes/customer letters issued by CIPC as the regulator.
• Your clients will also have to comply with the resultant General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Act regarding anti-money laundering measures to be taken – and more specifically, the Beneficial Ownership filing requirements.

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https://accountingacademy.co.za/profession/monthly-legislation-update

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