Enslins | Understanding the CIPC UBO

In a bid to fortify transparency and combat financial crimes, South Africa has embarked on significant legislative reforms, aligning with global standards set by the Financial Action Task Force (FATF). Central to these reforms is the establishment of the Beneficial Ownership Register, aimed at shedding light on the ultimate owners and controllers of corporate entities.

The Need for Transparency

The FATF’s Mutual Evaluation Report of South Africa underscored the necessity of robust anti-money laundering and counter-terrorism financing measures. Identified deficiencies highlighted the imperative to ensure timely access to accurate beneficial ownership (BO) information, which is crucial for law enforcement agencies in their investigations.

Key Legislative Changes

The enactment of the General Laws (Anti-money Laundering and Combating Terrorism Financing) Amendment Act 22 of 2022 catalysed pivotal amendments to the Companies Act, 71 of 2008. Additionally, the introduction of the Companies Amendment Regulations, 2023, outlined stringent requirements for companies regarding beneficial ownership disclosures.

Understanding Beneficial Ownership

Beneficial owners, defined as individuals who ultimately own or control a company, must now be identified and documented by all registered companies with the Companies and Intellectual Property Commission (CIPC). This information is vital for law enforcement agencies to combat various financial crimes, including money laundering, tax evasion, and corruption.

Filing Requirements and Deadlines

All companies, except certain exempted entities, are mandated to file beneficial ownership information with the CIPC. The filing process necessitates providing detailed information about beneficial owners and ensuring the accuracy and currency of these records. Failure to comply with filing requirements may result in significant penalties and enforcement actions.

When is the deadline for filing to CIPC?

The original deadline for filing to CIPC was 1 October 2023, which was 6 months from the commencement of the General Laws Amendment Act. 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.

Legally speaking, companies are also required to file any changes to this information within 10 days of changes occurring. However, the CIPC does not currently support the submission of changes to beneficial ownership.

Navigating the complexities of beneficial ownership disclosures can be daunting for companies amidst evolving regulatory requirements. Enslins offers a solution-driven approach, providing expert guidance and support to ensure seamless compliance. With Enslins by their side, companies can confidently navigate regulatory obligations, contributing to a transparent and compliant business environment.

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