{"id":702921,"date":"2023-07-10T13:38:33","date_gmt":"2023-07-10T11:38:33","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=702921"},"modified":"2023-07-10T13:38:33","modified_gmt":"2023-07-10T11:38:33","slug":"big-change-for-businesses-in-south-africa-with-3-months-to-comply","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/trending\/702921\/big-change-for-businesses-in-south-africa-with-3-months-to-comply\/","title":{"rendered":"Big change for businesses in South Africa &#8211; with 3 months to comply"},"content":{"rendered":"\n<p>The Companies and Intellectual Property Commission (CIPC) has released its new &#8216;Beneficial Ownership Register&#8217; platform that companies must fulfil, says Micaela Paschini, an attorney at Tax Consulting SA.<\/p>\n\n\n\n<p>Paschini said that businesses are <strong>now required to declare their beneficial ownership to the CIPC before October 2023<\/strong>, following concerns raised by the Financial Action Task Force (FATF) over the country&#8217;s failings in terms of financial crime and anti-money laundering.<\/p>\n\n\n\n<p>This means the &#8216;warm body&#8217; that sits behind a company <strong>can no longer remain off the record<\/strong>.<\/p>\n\n\n\n<p>She said this has far-reaching implications for anyone who owns an asset which is either of value or has a more complex ownership structure.<\/p>\n\n\n\n<p>Failure to update and maintain this information will result in the CIPC considering the company as non-compliant, but more importantly, it weakens the company in almost every aspect of doing business, including placing the banking relationships at risk, Paschini said.<\/p>\n\n\n\n<p>The FATF, of which the government has adhered to its recommendations, said that sanctions should be applied to companies that breach their beneficial ownership obligations.<\/p>\n\n\n\n<p>The functionality for the declaration of Beneficial Ownership has been added to the CIPC&#8217;s e-services landing page, as is shown below:<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full\"><a  data-lightbox=\"post-image\" href=\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2023\/07\/image001-4.png\"><img loading=\"lazy\" decoding=\"async\" width=\"554\" height=\"425\" src=\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2023\/07\/image001-4.png\" alt=\"\" class=\"wp-image-702953\" srcset=\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2023\/07\/image001-4.png 554w, https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2023\/07\/image001-4-300x230.png 300w\" sizes=\"auto, (max-width: 554px) 100vw, 554px\" \/><\/a><\/figure><\/div>\n\n\n<p>Although there have been a handful of new documents companies must complete to comply with the CIPC, beneficial ownership registration is probably the most urgent, she said.<\/p>\n\n\n\n<p>Companies and close corporations are now required to establish and maintain a Beneficial Ownership Register, including:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Profit companies<\/li>\n\n\n\n<li>Non-profit companies<\/li>\n\n\n\n<li>External companies<\/li>\n\n\n\n<li>Non-exempt state-owned companies<\/li>\n\n\n\n<li>Close corporations<\/li>\n<\/ul>\n\n\n\n<p>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, said Paschini.<\/p>\n\n\n\n<p>&#8220;Beneficial Ownership&#8221;, in relation to a company, refers to a person who, either directly or indirectly, &#8220;ultimately owns that company or exercises effective control of that company,&#8221; said Paschini.<\/p>\n\n\n\n<p>Some examples of Beneficial Ownership include where a person:<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li>Has a beneficial interest in the shares of a company;<\/li>\n\n\n\n<li>Exercises, or controls the exercise of, voting rights associated with shares of a company;<\/li>\n\n\n\n<li>Exercises, or controls the exercise of, the right to appoint or remove directors of a company;<\/li>\n\n\n\n<li>Is able to exercise control, including through a chain of ownership or control, of: a legal entity, body of persons, partnership, or a person acting under the provisions of a trust agreement (i.e. a trustee or beneficiary);<\/li>\n\n\n\n<li>Can materially influence the management of a company in any other manner.<\/li>\n<\/ol>\n\n\n\n<p>To comply with regulations, <strong>individuals holding more than 5% Beneficial Ownership in a company must submit their information to the CIPC<\/strong>. Furthermore, any changes in Beneficial Ownership must be updated within five days of the change.<\/p>\n\n\n\n<p>Once the information has been captured on the CIPC&#8217;s platform, it is processed, and a confirmation certificate will be issued.<\/p>\n\n\n\n<p>&#8220;Failing to establish and maintain a Beneficial Ownership Register may prove dire for companies and their directors alike. One may face investigations, a compliance notice, severe penalties and fines, and directors of companies may be disqualified,&#8221; said Tax Consulting SA.<\/p>\n\n\n\n<p>Paschini said that the compliance burden ultimately rests on shareholders, directors and owners of companies to comply with the CIPC&#8217;s new requirements.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>Read:<a rel=\"noreferrer noopener\" href=\"https:\/\/businesstech.co.za\/news\/business\/702363\/the-25-best-companies-to-work-for-in-south-africa\/\" target=\"_blank\"> The 25 best companies to work for in South Africa<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Companies must submit critical information relating to beneficial owners to the Companies and Intellectual Property Comission (CIPC).<\/p>\n","protected":false},"author":10,"featured_media":683275,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[6504,26],"class_list":["post-702921","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-trending","tag-cipc","tag-headline"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/702921","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=702921"}],"version-history":[{"count":5,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/702921\/revisions"}],"predecessor-version":[{"id":702979,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/702921\/revisions\/702979"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/683275"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=702921"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=702921"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=702921"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}