CIPC News Summary August 2024
Update on CIPC Investigation into Nova Propgrow and Sharemax (CIPC Media release)
The Companies and Intellectual Property Commission (CIPC) continues its thorough investigation into the operations of Nova Propgrow Holdings Ltd and Sharemax Investments Pty Ltd. The focus is on identifying compliance issues potentially linked to reckless trading or insolvency concerns. Key developments to date are listed below.
The initial phase of fact-finding has concluded. Further documents are anticipated to bolster the final investigative report. The initial phase of fact-finding has concluded. Further documents are anticipated to bolster the final investigative report.
Enforcement measures will be informed by forthcoming hearings, with a strategic aim to rectify Nova’s operational misalignments with statutory requirements, ensuring minimal stakeholder detriment.
Persistent non-compliance has led to the deregistration of one of Nova’s subsidiaries. A dispute concerning a compliance notice issued in 2022 remains unresolved.
The next steps includes a pivotal regulatory meeting that was initially slated for June 2024 but has been re-scheduled. Stakeholders are granted a 30-day period to review the preliminary findings ahead of the final deliberation.
This ongoing case serves as a critical reminder to property syndication professionals about the imperative of strict adherence to the Companies Act, underscoring the severe implications of non-compliance.
New Rules: Close Corporation Transfer of Member’s Interest (CIPC Notice 51 of 2024)
From 12 August 2024, the CIPC mandates new documentation standards for transferring a member’s interest in Close Corporations. Required submissions must now include a Proof of Transfer, specifying the place, date, and a witness’s signature, as stipulated in the updated Close Corporations Act 69 of 1984. Compliance with these enhanced controls is crucial.
CIPC Introduces Online Filing for Prospectuses Starting September 2024 (CIPC Notice 52 of 2024)
Starting 1 September 2024, the CIPC will shift the filing of prospectuses to its new online e-services portal. Until then, submissions will continue via the existing email system. In instances of prospectus rejection, clients will have five business days to address any issues, failing which could incur additional fees. This transition highlights the importance of embracing digital solutions and adhering promptly to new procedural norms.
Urgent: File Beneficial Ownership Information to Avoid Penalties (Customer Notice 54 and CIPC Notice 58 of 2024)
Following the regulatory update that made filing beneficial ownership details mandatory from 24 May 2023, CIPC has intensified its compliance checks. Entities that have not yet complied are urged to submit their details promptly to avoid investigations and potential heavy fines. Detailed filing instructions are available, and for further assistance, refer to CIBA’s Beneficial Ownership guide available under Practice Tools/Guides on the CIBA profile. For those incorrectly notified by CIPC’s recent emails, please disregard these communications and ensure compliance within the stipulated seven-day period.
Additional Function on Beneficial Ownership Declaration Service for Complex Structures (CIPC Notice 61 of 2024)
As of 23 August 2024, the CIPC's Beneficial Ownership Declaration service has been enhanced to accommodate filings for complex ownership structures, which is pivotal for entities with layered ownership tiers. This update is crucial for accurate disclosure of natural persons who ultimately control the entities. Detailed filing guidance can be accessed through the CIPC enquiry system.
Highlights from the CIPC Webinar on Beneficial Ownership
A recent webinar hosted by CIPC on 23 July 2024 provided significant insights into the requirements and procedural nuances of beneficial ownership declarations. The session, now available on YouTube, is particularly vital following the implementation of functionalities that prevent the submission of annual returns without these declarations. Key takeaways include the importance of timely submissions, the nuances of authorising filings, and the specific obligations of trusts in declaring beneficial ownership. The recorded webinar is available on YouTube and you can view the slides on the CIPC website under Webinars and Presentations.
