CIPC: Processing delays in various services due to spaza shop registrations

CIPC: Processing delays in various services due to spaza shop registrations

• 27 November 2024
• CIPC
• South African Accounting Academy

Summary:

The Companies and Intellectual Property Commission (“CIPC”) has informed customers that due to a drastic increase in the volume of registration of spaza shops (as per the directive of the President of the Republic of South Africa), significant delays are experienced in various services.

Article:

The following services are affected by significant delays:

1. Foreigner Assurance (“FAV”);
2. Name Reservations; and
3. New company registrations especially short standard private companies on the e-Services platform.

With the introduction of the Beneficial Ownership Hard Stop on Annual Returns, the volume of foreigner assurance applications drastically increased since foreign nationals must be assured via FAV before being able to file Beneficial Ownership Declarations. This resulted in the average turnaround time of 2 working days increased to 5 to 7 working days. The directive of the President, for spaza shops to be registered with the CIPC as companies, additional to the municipality registration, has resulted in an additional increase of applications. Customers need to expect a turnaround time of 10 to 15 working days for FAV, 5 working days for name reservations, and 5 to 10 working days on new company registrations for the near future until such time all spaza shops have complied with the directive of the President to register as companies (together with their registration at their local municipalities).

For full details regarding the above mentioned please refer to the Notice.

Click here to download Notice 72 of 2024:

https://www.cipc.co.za/wp-content/uploads/2024/11/Notice-Service-Delays_Spaza-Shops_v1.0.docx.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.
• You should be especially aware of expected delays experienced by CIPC – e.g. in certain services that have been affected by the large volume of spaza shop registrations.

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.
• Clients should be especially aware of expected delays experienced by CIPC.

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