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Beneficial Ownership Declarations

The Companies and Intellectual Property Commission (CIPC) recently announced the promulgation of amendments to the Companies Act 71 of 2008, in relation to beneficial ownership. The amendments, in part, give the CIPC a mandate to require companies to file and update Beneficial Ownership information, as and when applicable.

Failure to comply with the provisions relating to the beneficial ownership register requirements/beneficial interest register requirements constitutes an offense under the Companies Act and a compliance notice may be issued in the case of noncompliance and an administrative penalty may be imposed on such an entity.

Who are the beneficial owners?

The beneficial owners are the 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 any share class. Typically, these are the shareholders or members of a company.

Who needs to file beneficial ownership?

The following types of companies are required to file beneficial ownership to CIPC:

All companies and close corporations registered in South Africa, regardless of size or type.
This includes external companies (e.g., non-profit, private and public companies) operating in South Africa.

When to file:

Initially: Within 10 business days of incorporating the company or close corporation.
Updates: Whenever there is a change in beneficial ownership (e.g., a shareholding change), and at least once annually.

When is the deadline for filing this with the Companies and Intellectual Property Commission?

The new deadline for filing beneficial ownership to CIPC is within 30 days of the company's next anniversary date (similar to annual returns) or within 10 days of incorporation if they were registered after 24 May 2023.

Consequences of non-compliance:

Failure to file a beneficial ownership declaration or filing inaccurate information can result in:

- Administrative penalties
- Criminal prosecution.
- Difficulty in filing annual returns and conducting other business with CIPC.
- Possible investigations and sanctions, including compliance notices, administrative fines, and the disqualification of directors.

All this adds a significant administration burden on South African Businesses…

Let us at South African registrations can assist your company to stay compliant with the Companies and Intellectual Property Commission with the filing of your Beneficial Ownership Declaration with all supporting documentation.