*As of 1 April 2023, South African companies are required to file their beneficial ownership to the CIPC*
Understanding the Legal Requirements for Beneficial Ownership
In an effort to combat money laundering and terrorist financing, the South African government introduced the General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Act 22 of 2022, which came into effect on April 1, 2023. This act includes amendments to the Companies Act 71 of 2008, mandating companies to maintain a register of beneficial owners and submit this information to the Companies and Intellectual Property Commission (CIPC) regularly. It also defined concepts such as beneficial owners and affected companies.
The purpose of these amendments was to provide the relevant authorities with the necessary information to reduce the risk of money laundering, financial crimes, and reputation damage.
Who Needs to File Beneficial Ownership?
The following types of companies are required to file beneficial ownership information with the CIPC:
- Private Companies (“PTY“)
- Close Corporations (“CC“)
- Non-Profit Companies (“NPC“)
- State-Owned Companies (“SOC“)
- Personal Liability Companies (“PLC“)
- Public Companies (“LTD“)
While public companies’ records are maintained by competent authorities like the Johannesburg Stock Exchange (“JSE“), they are still obligated to submit a register of beneficial owners as per the amended Companies Regulations.
Primary Co-Operative (“co-op”) companies are not required to file beneficial ownership to CIPC – current amendments don’t include co-ops.
In terms of who can file beneficial ownership, anyone who has been mandated by the company to file this information may do so.
Identifying Beneficial Owners:
Beneficial owners are individuals who ultimately own or control a company, either directly or indirectly, by holding a beneficial interest of 5% or more in the company or share class. Typically, these are the shareholders or members of a company.
*The CIPC only record beneficial owners with 5% or more ownership in the company*
In the case of a PTY, shareholders are:
- Individuals holding 5% or more of the issued shares
- Companies with beneficial owners holding a beneficial interest of 5% or more in the original company
- Trusts with beneficiaries (although this information is not required by CIPC as it’s submitted to the Master of the High Court)
- In the case of a CC or PLC, members holding 5% interest or more in the company.
- In the case of an NPC with members, the members would be the beneficial owners.
- In the case of an NPC without members, the directors would be the beneficial owners.
- In the case of an SOC where a shareholder is a minister, the minister would be the beneficial owner.
Filing Procedures:
Leading Edge can assist you in navigating the complexities of beneficial ownership filing and ensure your company’s compliance with the latest regulations.
The following documents should be prepared:
Mandate to Lodge Beneficial Ownership
Register of Beneficial Owners
Register of Shareholders (or Members in the case of a CC, PLC, or NPC with members)
Verified/Certified IDs of beneficial owners
Once your beneficial ownership has been filed and the supporting documents submitted, you will receive a confirmation from the CIPC in the form of a certificate to confirm receipt.
Filing Deadlines:
The deadline for filing beneficial ownership information with the CIPC is within 30 days of the company’s next anniversary date (similar to the annual return) or within 10 days of incorporation if the company was registered after May 24, 2023.
Legally speaking, companies are also required to file any changes to this information within 10 days of changes occurring. However, the CIPC does not currently support the submission of changes to beneficial ownership.
