CIPC: Rejection of BRP license renewal applications pending the filing of status reports

CIPC: Rejection of BRP license renewal applications pending the filing of status reports

• 09 July 2024
• CIPC
• South African Accounting Academy

In an effort to enforce proper compliance of the Companies Act, all practitioner license renewal application will be rejected pending the filing and updating of business rescue proceedings status reports with CIPC. Therefore, BRPs, not compliant with requirements of section 132(3) of the Act, will be prohibited from renewing their practitioner license until all reports have been filed and brought up to date.

Practitioners, are urged to comply with the provision of section 132 (3) (a)-(b) of the Act, by ensuring that they file and update the legislatively required status reports monthly, until the end of the proceedings.

Section 132(3), of the Act, states: –

• “(3) If a company’s business rescue proceedings have not ended within three months after the start of those proceedings, or such longer time as the court, on application by the practitioner, may allow, the practitioner must-
  • (a) prepare a report on the progress of the business rescue proceedings, and update it at the end of each subsequent month until the end of those proceedings; and
  • (b) deliver the report and each update in the prescribed manner to each affected person, and to the-
    • (i) court, if the proceedings have been the subject of a court order; or
    • (ii) Commission, in any other case.

CIPC has as one of its key objectives in terms of section 186 (1) (d) of the Companies Act 71 of 2008 (the Act), a responsibility to promote compliance with the Act, and furthermore the Commission is required to enforce the Act by monitoring proper compliance as per section 187(2)(b) of the Act.

Click here to download Notice 44 of 2024:

https://www.cipc.co.za/wp-content/uploads/2024/07/NOTICE-BR-STATUS-REPORTS.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 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 companies and company secretarial practitioners to keep abreast of such changes in so that companies continue to meet their compliance 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 and to be aware of the latest media statements issued by CIPC as the regulator.

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