Key Updates from the Companies Act and CIPC for 2024

Key Updates from the Companies Act and CIPC for 2024

• 10 April 2024
• CIPC
• South African Accounting Academy

We recently held an informative webinar outlining important changes to the Companies Act and CIPC procedures that take effect in 2024. Here are the key highlights:

Beneficial Ownership Transparency

• From April 1, 2024, companies will not be able to file annual returns unless their beneficial ownership information is up-to-date in the CIPC register. This is part of South Africa's efforts to combat money laundering and terrorist financing.
• Beneficial owners are the natural persons who directly or indirectly ultimately own or exercise control over a company. Companies must disclose beneficial owners with a 5% or greater interest.
• Supporting documents required include an organogram showing ownership structure, a securities register, and certified ID copies/notarized passports.

Automated Director Changes

• Director changes are now filed through a new automated system on the CIPC website. Directors must first verify their details before companies can update director information.
• OTP security codes are sent via SMS and email to the director and must be submitted to authorize changes.
• While supporting documents (e.g. resolutions) are not required to be uploaded, companies must still keep records of these documents.

Foreign Director Verification

• Foreign directors must complete a separate verification process through the Foreigner Assurance portal before being appointed.
• Notarized passport copies are mandatory for foreign directors to verify their information.

Customer Registration & Security

• Each director must register as a customer on the CIPC website with their own login to manage their director details.
• Sharing of login credentials with third parties is discouraged, as the individual initiating director changes is responsible for the information submitted.

Annual Financial Statements & Annual Returns

• The new online filing system prohibits companies from submitting annual returns until their beneficial ownership register and annual financial statements are filed.
• Failure to comply may result in compliance notices, investigations, penalties and possible deregistration by the CIPC.

By implementing these changes, the CIPC aims to improve corporate transparency, prevent fraud, and align with global standards. Companies should familiarize themselves with the new requirements to ensure seamless compliance going forward. While some of the processes may require additional time and paperwork initially, they serve the greater purpose of promoting sound corporate governance in South Africa.

To purchase access to the full webinar recording and detailed slides covering all the critical Companies Act and CIPC changes for 2024, visit Companies Act Update 2024.

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