What is Beneficial Ownership ?
The Beneficial Ownership Declaration is a new regulation introduced by CIPC to identify the natural persons who ultimately own or control a corporate entity, either directly or indirectly. On 29 December 2022, the South African government enacted the General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Act 22 of 2022, which includes amendments to the Companies Act 71 of 2008. These amendments took effect on 1 April 2023.
The intent of this regulations is to equip relevant authorities with the information needed to mitigate risks related to money laundering, financial crimes, and reputational damage.
Risk of not filing Beneficial Ownership
Non-compliant beneficial ownership information filings will trigger possible investigations and sanctions, including compliance notices, administrative fines, and the disqualification of directors
What is the deadline for filing Beneficial Ownership ?
Effective 1 July 2024, a hard-stop functionality has been enforced, requiring that a beneficial ownership filing be completed within the same calendar year as the company’s annual return filing.
Failure to file the beneficial ownership information will prevent the submission of the annual return.
Who are Beneficial Owners of a company ?
The beneficial owners are the individuals who ultimately own or control a company, either directly or indirectly, by holding a beneficial interest of 5% or more in the company. These are usually the shareholders or members of a company.
In the case of a PTY, the beneficial owners are the shareholders if they are:
- Individuals holding 5% or more of the issued shares
- Companies with beneficial owners holding a beneficial interest of 5% or more in the original company (including foreign companies)
- Trusts with beneficiaries