On 10 January 2025, the Companies and Intellectual Property Commission (“CIPC”) issued a notice along with a list of non-compliant entities urging them to submit their beneficial ownership declarations and securities registers by 21 January 2025, failure of which will result in the non-compliant entity being prohibited from transacting with the CIPC. Non-compliant entities will receive compliance notices from the CIPC and may be subjected to administrative fines or ultimately the deregistration of the company.
The filing of beneficial ownership declarations and securities registers has been mandatory since 24 May 2023 under the Amended Companies Regulations, 2023 (“Amended Companies Regulations”) with new entities expected to file their beneficial ownership information within 10 business days from the date of incorporation. Beneficial ownership in respect of a company means, an individual who, directly or indirectly, ultimately owns that company or exercises effective control over 5% or more of the shares in that company. The requirement for filing beneficial ownership declarations and securities registers is part of South Africa’s broader efforts to implement the General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Act, 2022, which mandates transparency in company ownership to combat money laundering and terrorist financing.
The Beneficial Ownership Register created by the CIPC initially only catered for entities that have beneficial ownership to declare. The CIPC has since then confirmed in a notice on 18 July 2023 that they have made provisions for affected and non-affected companies that do not have beneficial ownership to declare, to complete their filing by submitting a securities or members register. This provision made by the CIPC is particularly important given the CIPC’s hard stop deadline that was put in place on 1 April 2024, which blocked companies from filling their annual returns until they have completed their beneficial ownership filling. Affected companies are public companies, state-owned companies or any private company that has had a change of shareholding of more than 10% over the last 24 months.
The CIPC has been proactive in notifying non-compliant entities by sending notices to the contact details of directors and company secretaries registered in their database. It is therefore vital that these contact details are accurate and up to date, as communications must be directed towards the company’s director or members of the company or close corporation. Directors, company secretaries and members can use the this link to ascertain whether their companies appear on the list of entities that are non-compliant with beneficial ownership filling.
Non-compliance with the filing requirements contravenes the Amended Companies Regulations and exposes entities to severe consequences. Entities that fail to file within the stipulated time frames will be barred from conducting business with the CIPC, face potential fines, and could be referred for deregistration. Therefore, it is imperative that directors, company secretaries, and members ensure full compliance with the legislation and take immediate action to update their contact details with the CIPC if necessary and complete the necessary filling of beneficial ownership information, securities or members register in order to avoid repercussions that may flow from non-compliance.
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