CIPC's System Updates: Insights for Accountants
Introduction
In a rapidly evolving regulatory environment, the Companies Liaison Committee held its latest quarterly stakeholder meeting with the Companies and Intellectual Property Commission (CIPC) on 27 February 2024. The meeting dealt with various system changes that carry significant weight for accounting practices, underscoring the urgency for adaptation and strategic planning. CIPC provided updates on beneficial ownership reporting, director amendment updates, foreigner assurance automation and the bulk deregistration drive.
Discussion Points
The CIPC's commitment to align with the Financial Action Task Force (FATF) requirements was evident, as they discussed measures taken to ensure that South Africa is removed from the greylist, emphasising the critical nature of compliance.
Beneficial Ownership Reporting
CIPC provided an update on the Beneficial Ownership (BO) system, which now mandates companies to file beneficial ownership information within ten days of any changes or when filing annual returns. It was noted that the system now checks for an up-to-date BO before an entity can proceed with its Annual Return (AR). Furthermore, CIPC is busy addressing the concern that the security registers are currently uploaded in PDF format. The requirement to file beneficial ownership information within 10 days of any changes was reiterated.
Foreign Assurance Process
The meeting also addressed the foreign assurance process, which now includes electronic vetting of foreigners' passports and other information when they are appointed as directors or beneficial owners. There were initial challenges with one-time passwords (OTPs) going to cell phones, which have since been resolved, with OTPs now being sent to emails or phones.
De-Registration of Entities
A significant number of entities have been deregistered far, and the CIPC will be fast-tracking this process. Companies are urged to keep their annual reports up-to-date as the compliance cycle will be shortened. Reinstatement of deregistered companies is not automatic, and dormant companies will find this challenging.
CIPC does not automatically re-instate entities de-registered. A process must be followed as per provided guidance, and each case is considered based on its merits.
Director's Amendment Process
Additionally, the director's amendment process was a key discussion point, acknowledging that the new system is a work in progress. Members were frustrated due to validation errors and the slow link with the Department of Home Affairs. However, it was highlighted that over 33,000 director amendments were completed out of over 50,000 applications received, suggesting a solid effort towards resolution.
Language Used in Communicating with CIPC
Issues with the language requirements for certification of documents from abroad were discussed, establishing that translations into English are necessary before submission.
Interpretation of ‘Annual Turnover’
The interpretation of ‘annual turnover’ and ‘revenue’ for annual reports was also a topic of concern, and an update from the CIPC is awaited. It was noted that the definition of these terms should align with the International Financial Reporting Standards (IFRS).
Practical Advice for Accountants
Accountants should familiarise themselves with the CIPC's user guides, prepare clients for a tighter compliance cycle, and ensure the translation of foreign documents. It’s essential to understand the intricacies of the updated systems to navigate filings accurately and avoid the pitfalls of non-compliance, particularly with the new directives regarding beneficial ownership.
Companies must adhere to the new beneficial ownership filing requirements within the stipulated timeframes.
Stakeholders are to familiarise themselves with the CIPC user guides for detailed information on the securities and beneficial ownership registers.
Stakeholders to ensure that document translations are provided where necessary to avoid application delays.
CIPC monitors unresolved tickets. Those that remain unresolved for long period and those with poor-quality responses should be escalated.
In Conclusion
The meeting's insights crystallise into a call to action for accountants to proactively embrace the CIPC's system changes. By adhering to the updated processes and leveraging the CIPC's resources, accountants can guide clients through the regulatory thicket with confidence and compliance.
Communicate news on CIPC systems to your clients
Below is a template letter you can send out to your clients to inform them of the key CIPC updates. Remember to personalise each letter with the client’s specific details to maintain a personal touch.
[Accountant's Name]
[Accounting Firm's Name]
[Address]
[Today’s Date]
[Client's Name]
[Address]
Dear [Client's Name],
We're Steering Through Changes Together
We must stay ahead of the curve in a rapidly changing business landscape. The Companies and Intellectual Property Commission (CIPC) has recently updated its systems and regulations, which means there are some new steps we need to take together to keep your business on track. Our professional body, CIBA, represents us at key stakeholder events, enabling us to provide you with this update.
What's New with the CIPC?
Some fundamental changes include a new beneficial ownership filing system, the need for up-to-date annual reports, and stricter oversight of director amendments. Also, if you're working with international partners, remember that any foreign documents need an English translation before submission.
Why do we need to act now?
Staying on top of these changes is crucial. Falling behind could mean penalties for your business or even legal issues. But worry not – this is precisely where we can step in and help you.
Let us help you be compliant
As your accounting partner, we're ready to roll up our sleeves and ensure your business meets these new CIPC requirements. From updating records to filing reports, we'll handle the details so you can focus on what you do best – running your business.
What's the Next Step?
We invite you to discuss how these changes affect your business and how we can smooth out the transition. Please feel free to contact us to make arrangements.
Let's Keep Your Business Thriving
Thank you for trusting us with your accounting needs. We're here to make sure these new changes are nothing but a small bump on your road to success. Please give us a call at [Phone Number] or send an email to [Email Address], and we'll take it from there.
Best Regards,
[Your Name] [Your Title] [Accounting Firm's Name]
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