The General Laws Amendment Act, which concentrates on Anti-Money Laundering and Combating Terrorism Financing, was brought into effect on December 29, 2022. This legislation has instigated a series of changes to beneficial ownership structures, aiming to standardise the definition of a beneficial owner across various acts, including the Companies Act. In the updated Companies Act, a beneficial owner is defined as an individual who has or exerts “effective control” over a company, either directly or indirectly. In accordance with these amendments, businesses must comply with the heightened disclosure requirements pertaining to declarations of company beneficial ownership.
Understanding Company Beneficial Ownership Declarations
Intricate corporate structures are frequently used for lawful purposes, including maintaining the privacy of wealthy individuals and their kin or managing the inherent risks associated with family-run businesses. However, these structures can also be manipulated to conceal illegal activity, such as money laundering, fraud, and tax evasion. Effective law enforcement relies on obtaining accurate beneficial ownership information from accountable entities. Consequently, lack of transparency presents considerable obstacles – amplifying the demand for transparent corporate structures.
The need for beneficial declarations has emerged to ensure institutions have access to accurate, current, and validated beneficial ownership data to support the fight against financial misconduct. This has led to the creation of a Beneficial Ownership Register, which is populated via the Company Beneficial Ownership Declaration process.
What is the objective of this register?
- To set up a database of individuals who own or oversee legal entities.
- To supply relevant data to law enforcement agencies to support their investigations.
- To diminish the hazards identified in the national risk evaluation, where legal entities were acknowledged as vulnerable to manipulation for financial wrongdoings.
Enjoy Hassle-free Company Beneficial Ownership Declarations
The CIPC keeps track of legal owners, but it does not record the shareholders and beneficial owners of a company. The goal of the General Laws Amendment Act is for the CIPC to maintain a register that contains accurate and up-to-date information on beneficial ownership. Non-registration of this information will, therefore, be viewed as a violation of the Companies Act and could result in an administrative fine.
The following entities are required to file company beneficial ownership declarations:
- Profit companies
- Non-profit companies
- External companies
- Close Corporations
Starting from R950 (ex VAT)
We can guide businesses through the intricate process of submitting company beneficial ownership declarations. Our team is proficient in the stipulations and procedures needed to provide the CIPC with reliable and current data. Collaborating with our team provides you with continuous support and helps your business stay compliant to evade potential administrative penalties.
Frequently Asked Questions
Who is a Beneficial Owner?
A beneficial owner refers to a person or an individual who, either directly or indirectly, holds a stake of 5% or more in a company or wields significant control over the company.
Can a company/Trust be a Beneficial Owner?
No, only an individual can be regarded as a beneficial owner.
What is the minimum threshold before a person can be considered a Beneficial Owner?
The minimum threshold of control required to be considered a Beneficial Owner is 5%.