Navigating Beneficial Ownership Regulations at CIPC in South Africa

CIPC Beneficial Ownership regulations in South Africa

As of December 11, 2023, South African businesses must include Beneficial Ownership information in annual returns filings with the Companies and Intellectual Property Commission (CIPC). Here’s what you need to know to ensure compliance and safeguard your business.

Comprehending CIPC’s Beneficial Ownership Mandate

Avoiding the risk of company deregistration is paramount. Ensuring that your Beneficial Ownership information is up-to-date is now a prerequisite for submitting annual returns to the CIPC. This requirement will be gradually implemented across all annual return platforms, with full enforcement starting on April 1, 2024.

Actions to Safeguard Your Business:

  1. Complete your Beneficial Ownership information.
  2. Once completed, proceed with filing your annual returns at CIPC.
  3. Timely submission of annual returns will protect your business from deregistration.

For detailed insights into the requirements and processes regarding Beneficial Ownership at CIPC in South Africa, please refer to the corresponding CIPC Notice 67 of 2023.

Defining Beneficial Ownership under CIPC Guidelines

Understanding the Regulatory Background:

In March 2023, South Africa found itself on the Financial Action Task Force (FATF) “grey list” due to identified deficiencies in its anti-money laundering and counter-terrorist financing (AML/CTF) frameworks. This prompted legislative amendments, including the General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Act 22 of 2022, which came into effect on April 1, 2023. These amendments introduced the requirement for maintaining an updated register of Beneficial Owners at CIPC, alongside standard compliance obligations.

What Constitutes Beneficial Ownership at CIPC?

Beneficial ownership pertains to individuals who either directly or indirectly own a company or exert effective control over it.

Reasons behind Beneficial Ownership Regulations:

Previously, companies weren’t obliged to disclose their Beneficial Ownership details to entities like CIPC, handling such matters internally. However, in response to governmental regulations, CIPC has established mechanisms for collecting and cross-referencing Beneficial Ownership information with relevant regulatory and law enforcement bodies such as the South African Revenue Service (SARS), the Financial Intelligence Centre (FIC), and the Financial Sector Conduct Authority (FSCA).

Deadline and Consequences:

The deadline for initial Beneficial Ownership register submissions was six months after the regulation announcement. Failure to comply may result in penalties, including a court-ordered administrative fine equivalent to 10% of the non-compliant company’s turnover or R1 million, whichever is higher.

These regulatory changes pose significant challenges to South African businesses. However, our specialist team can assist in filing Beneficial Ownership registers with CIPC efficiently and cost-effectively.

Stay compliant and safeguard your business against regulatory risks with proactive adherence to Beneficial Ownership requirements at CIPC.

Contact PATC Today

If you are looking for a reliable, cost-effective, and flexible accounting solution, look no further than PATC’. Contact us today to learn more about how we can help you achieve your financial goals. Take advantage of our one-hour *free consultation now.

If you need assistance in your business’ finances, from accounting to tax consulting and financial management, we can help you. Contact us today and let us know how we can help you.

Now read: Why You Need to Outsource Your Bookkeeping to PATC