Key Insights from the recent CIPC Webinar on Beneficial Ownership
The webinar hosted by the Companies and Intellectual Property Commission (CIPC) on 23 July 2024 discussed the nuances and legal requirements of beneficial ownership declarations. The session was particularly timely after implementing a hard stop functionality making it impossible to submit annual returns without beneficial ownership declarations.
The recorded webinar is available on YouTube and you can view the slides on the CIPC website under Webinars and Presentations. Below is a summary of the key points discussed, including answers to frequently asked questions that are critical for entities required to comply with these regulations.
Legal Requirement: It was highlighted that beneficial ownership declarations are mandated by law, in alignment with the amendments to the Companies Act, to promote transparency in company ownership and control structures.
Filing Intervals: Entities must submit these declarations at least annually. Additionally, any changes in ownership or control must be reported within 10 business days.
Updating Declarations: Declarations can be amended but cannot be deleted. Submitting false or misleading information is considered a criminal offense and is strictly prohibited.
Who is a Beneficial Owner: The webinar clarified that beneficial owners are those who exercise significant control over a company, which may include directors under specific circumstances.
Authorisation to File: The webinar explained that beneficial ownership declarations must be submitted by a natural person authorised by a formal mandate. This could be a letter, resolution, or power of attorney, approved by the majority of directors or all members of a close corporation.
Classification of Entities as non-affected and affected entities and non-affected companies lacking beneficial ownership information.
Securities Register Details: Maintaining an accurate and up-to-date securities register, inclusive of detailed shareholder information and their holdings, is essential for compliance.
Trusts’ Reporting Obligations: Trusts must report their beneficial ownership to the Master of the High Court. For trusts that significantly influence a company, the natural persons (trustees or beneficiaries) exerting control must also be declared.
Access the FAQs on Beneficial Ownership on CIPC website.
