CIPC Implements Stricter Beneficial Ownership Declaration Requirements for Companies and Close Corporations

Written on 01/07/2024
Nexia SAB&T

In a recent media release, the Companies and Intellectual Property Commission (CIPC) announced the enforcement of stricter regulations regarding the filing of Beneficial Ownership Declarations with Annual Returns for companies and close corporations. ​ This move is in response to the amendments made to the Companies Act, 2008, by the General Laws (anti-Money Laundering and Combatting Terrorism Financing) Amendment Act, 22 of 2022. ​ The aim of these regulations is to promote transparency, combat financial crimes, and enhance corporate governance in South Africa.

Key Points:

  1. Beneficial Ownership Declaration Requirement: ​
    • Starting from July 1, 2024, all companies and close corporations registered with the CIPC must file Beneficial Ownership Declarations along with their Annual Returns. ​
    • The Beneficial Ownership Declaration provides information about natural persons who own or exercise effective control over legal entities. ​
    • This requirement was introduced to assist law enforcement agencies in their investigations and mitigate the risks associated with money laundering and terrorism financing activities.
  2. Filing Deadline and Consequences of Non-Compliance:
    • Companies and close corporations must file their Annual Returns, including the Beneficial Ownership Declaration and security register or beneficial interest register (as applicable), within 30 business days after their anniversary date. ​
    • Failure to comply with the Beneficial Ownership filing requirements may result in penalties for late filing of Annual Returns. ​
    • The CIPC may take enforcement action, including investigation into the administration and governance processes of a business, issuing compliance notices, and even referral for deregistration or final deregistration due to noncompliance. ​

The CIPC's implementation of stricter regulations regarding the filing of Beneficial Ownership Declarations with Annual Returns for companies and close corporations is a significant step towards promoting transparency, combating financial crimes, and enhancing corporate governance in South Africa. ​ By complying with these requirements, businesses can contribute to the country's economic growth and development while ensuring good governance practices. It is crucial for all affected entities to familiarize themselves with the new regulations and meet the filing deadlines to avoid penalties and potential enforcement actions.

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