CIPC: Foreigner Assurance common problems

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CIPC: Foreigner Assurance common problems

• 05 December 2024
• CIPC
• South African Accounting Academy

Summary:

The Companies and Intellectual Property Commission (CIPC) hereby informs customers that it is receiving a high volume of poor-quality applications on the foreigner assurance process which contributes to unnecessary resubmission and enquiries.

Article:

CIPC takes note of the criticism from customers on the service and therefore would like to highlight common challenges experienced on the quality of applications on this service to improve the efficiency with which it is submitted by customers and assured by CIPC.  The rejection rate for applications on this service during July to September 2024 was 52%.

The following important information is set out in this notice:

1. Certification Requirements:
   • Identification of the Commissioner of Oath
   • Designation of Commissioner of Oath
   • Dated
2. Capturing of Detail
3. General

Customers are also urged to strictly comply with the guidelines (especially Practice Note 2 of 2022) on how documents must be prepared, completed and/or certified since it is the responsibility of every customer who submits documents to the CIPC to ensure that they are correct, complete and compliant before being submitted.  Applications that do not comply will be rejected by the CIPC.

Customers who engage in the business of assisting others with the registration, maintenance etc. of legal entities may be regarded as accountable institutions in terms of the Financial Intelligence Centre Act and in such instance must be registered with the Financial Intelligence Centre and comply with the Financial Intelligence Centre Act which includes reasonable due diligence in the identification of clients as part of their on-boarding process.

Access Practice Note 2 of 2022 at https://www.cipc.co.za/wp-content/uploads/2022/06/Practice_Note_-_CERTIFICATION_2.pdf

Click here to download the document:

https://www.cipc.co.za/wp-content/uploads/2024/12/Notice-Foreigner-Assurance_v1.4.pdf

Relevance to Auditors, Independent Reviewers & Accountants:

• The Companies 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 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.
• If you engage in the business of assisting others with the registration, maintenance etc. of legal entities, you may be regarded as an accountable institution in terms of the Financial Intelligence Centre Act (FICA), and in such instance must be registered with the Financial Intelligence Centre and comply with the FICA which includes reasonable due diligence in the identification of clients as part of their on-boarding process.

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.

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