CIPC: Enforcing beneficial ownership information with annual return filings for companies and CCs

CIPC: Enforcing beneficial ownership information with annual return filings for companies and CCs

• 19 March 2024
• CIPC
• South African Accounting Academy

CIPC will strictly enforce the filing of Beneficial Ownership Declarations (BO) information with the filing of Annual Returns, as from 15 April 2024. In terms of this hard-stop functionality, companies and close corporations will not be allowed to file its Annual Return via any of the CIPC electronic platforms UNLESS BO has been submitted and/or is up to date. As per the Act as amended, BO, AFS/FAS must be filed with Annual Returns.

In terms of the amendment, as from 24 May 2023 with the implementation of the relevant Regulations, all companies and close corporations must file its annual return with the Commission, together with its beneficial ownership declaration and security register or beneficial interest register (as applicable), within 30 business days after their anniversary date.

Therefore, if BO is not up to date the company or close corporation may:

• Incur penalties for the late filing of Annual Returns;
• Enforcement action may be taken by the CIPC through investigation into the administration and governance processes of your business and even the issuing of a compliance notice; and/or
• Referral for deregistration and even final deregistration due to non-compliance.

Information Links:

• Webinars and Presentations – https://www.cipc.co.za/?page_id=13979
• CIPC inclusion of Beneficial Ownership filing and validation of turnover on Annual Returns webinar 04 December 2023
• Annual Returns webinar / presentation 10 October 2023
• Beneficial Ownership webinar / presentation 21 August 2023
• User Guide – https://www.cipc.co.za/?page_id=4447 / Beneficial Ownership

(more resources or changes to the existing resources may occur from time-to-time)

It is imperative that ALL companies and close corporations ensure compliance with the beneficial ownership filing requirements, to ensure good corporate governance and business continuity.

Click here to download Notice 26 of 2024:

https://www.cipc.co.za/?p=20728

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.
• 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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