The Companies and Intellectual Property Commission (CIPC) has launched its new 'Beneficial Ownership Register' platform that businesses must comply with.
Businesses now have to disclose their beneficial ownership to the CIPC by 1 October 2023, as a result of concerns expressed by the Financial Action Task Force (FATF) on the nation's shortcomings in terms of financial crime and anti-money laundering.
This implies that the "warm body" behind a firm may no longer speak anonymously.
The CIPC will consider the company to be non-compliant if this information is not updated and maintained, but more importantly, it hurts the company in practically every element of conducting business, including putting the banking connections at danger. The FATF recommended that corporations that violate their requirements to maintain beneficial ownership should face sanctions, and the government has followed this advice.
The CIPC's e-services landing page now includes capabilities for the declaration of Beneficial Ownership, as displayed below:
Although there have been a few new forms that businesses must fill out in order to comply with the CIPC, the registration of beneficial
ownership is perhaps the most crucial.
Companies and close companies must now create and keep a Beneficial Ownership Register that includes the following entities:
Non-exempt state-owned companies
Listed companies who qualify as affected companies are, however, subject to a slightly different set of requirements, but the concept of Beneficial Ownership remains the same.
With regard to a firm, "beneficial ownership" refers to a person who, directly or indirectly, "ultimately owns that company or exercises effective control of that company.
Beneficial Ownership can occur, for instance, when someone: possesses a beneficial interest in a company's shares; a person who utilizes or oversees the use of voting rights attached to stock in a firm; possesses the authority to appoint or remove a company's directors or has control over that activity; possesses the ability to exert influence over, including through a chain of ownership or control, a partnership, a legal entity, a group of people, or a person acting in accordance with the terms of a trust arrangement (such as a trustee or beneficiary); can fundamentally affect a company's management in any other way. Individuals holding more than 5% Beneficial Ownership in a corporation are required by law to provide the CIPC with their information. Additionally, updates must be made to Beneficial Ownership within five days of any changes.
A confirmation certificate will be issued after the data has been processed and entered into the CIPC's platform. "Companies and their directors may suffer if a Beneficial Ownership Register is not created and kept up to date. In addition to investigations, compliance notices, hefty penalties, and disqualification from serving as a director of a company.
It is ultimately the responsibility of shareholders, directors, and business owners to ensure compliance.
We will create an option on our website to assist you with the declaration.