CIPC: CC transfer of member’s interest

CIPC: CC transfer of member’s interest

• 14 August 2024
• CIPC
• South African Accounting Academy

This requirement is part of improving the controls relating to change in membership in a Close Corporation (CC).

The above stipulated are essential requirements in enforcing the transfer of member’s interest as enshrined in section 34 of the Close Corporations Act 69 of 1984, which focuses on the attachment and sale in execution of member’s interest, section 35 which deals with the disposal of interest of deceased member, section 36 which deals with cessation of membership by order of Court and section 37 which looks at other dispositions of member’s interests.

Click here to download Notice 51 of 2024:

https://www.cipc.co.za/wp-content/uploads/2024/08/Notice-re-transfer-of-members-interest-signed-1.pdf

Relevance to Auditors, Independent Reviewers & Accountants:

• The Close Corporations Act 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 CCs Act and all relevant notices/enforcements/practice notes 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 and that you are aware of the latest media statements issued by CIPC as the regulator.
• Company Secretarial staff play a critical role in bridging the gap between entities and CIPC. As legislation, regulations and tax law are continuously changing and evolving, it is of utmost importance for CCs and company secretarial practitioners to keep abreast of such changes in so that CCs continue to meet their compliance obligations.

Relevance to Your Clients:

• A close corporation has a duty to comply with the Close Corporations Act, and members have to fulfil their duties accordingly, and all relevant notices/enforcements/practice notes and to be aware of the latest media statements issued by CIPC as the regulator.

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