A second customer notice from the CIPC reminds companies to file the required beneficial ownership and beneficial interest information and notes that enforcement action may be taken against continuously non-compliant companies. On 6 February 2024, the Companies and Intellectual Property Commission (CIPC) published a customer notice entitled "Enforcement of Beneficial Ownership Filings and Securities Registers". This is a follow-up notice to the one the CIPC issued in September 2023, reminding companies of their obligations under the recent amendments to the Companies Act, 2008 (Act) and Companies Regulations, 2011.
In the Notice, the CIPC stated the following:
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the filing of beneficial ownership and copies of securities registers became mandatory from 24 May 2023, the date of promulgation of the amendments to the Regulations[1]
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pre-existing entities whose anniversary date of incorporation was after the promulgation of the amendments to the Regulations are required to file their beneficial ownership information and a large number of entities have not yet done so;
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from 1 April 2024, a hard stop functionality will be introduced into the CIPC systems that will prevent entities from completing the filing of their annual returns if they have not first complied with the beneficial ownership filing requirements (this was previously communicated in a December 2023 media statement published by the CIPC dealing with its beneficial ownership interface); and
- all entities in the CIPC register must file the required information by 24 May 2024, being the anniversary date of promulgation of the amendments to the Regulations (effective from 24 May 2023) making the filing of the required information mandatory.
Although the Notice does not specifically address pre-existing companies whose anniversary dates of incorporation were before 24 May 2023, the amended Regulations require a company to file the necessary documentation with its annual returns, within 30 business days after the anniversary of the date of its incorporation. A number of these pre-existing companies are therefore already obligated to have filed their required information or their deadlines to do so will soon be approaching, given their anniversary dates of incorporation.
The CIPC said that it will be taking further and necessary enforcement actions against those companies that continue to be non-compliant. In the Notice, the CIPC does not expressly state what "further and necessary enforcement actions" it will take. However, the CIPC may issue compliance notices for contraventions of the Act. Failure to comply with a compliance notice could result in an administrative penalty issued by a court or prosecution by the National Prosecuting Authority for an offence in terms of the Act.
Companies should ensure that their company registers are up to date with relevant beneficial ownership and beneficial interest information (as relevant) and file the required information with the CIPC if they have not done so already.
Read the Enforcement of Beneficial Ownership Filings and Securities Registers notice.
Footnotes
[1] Broadly speaking, under the amendments to the Act and Regulations: (i) non-affected companies are required to record prescribed information on beneficial owners and beneficial interest holders in their securities registers, record beneficial ownership information with the CIPC and file copies of their securities registers with the CIPC; and (ii) affected companies a required to file copies of their securities registers and registers of disclosure of beneficial interests at or above 5% of the total number of a class of securities with the CIPC.
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Read the original publication at Webber Wentzel