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South Africa – New Beneficial Ownership requirements
In an effort to combat money laundering, South Africa has introduced new beneficial ownership disclosure requirements for companies.
On the 24th of May 2023, the Government Gazette published the final Companies Amendment Regulations, providing clarity on the new provisions of the Companies Act regarding the disclosure of Beneficial Ownership information.
The amendments impose broader obligations on companies to keep records of persons with beneficial interests in their securities register, as well as requiring records to be filed with the Companies and Intellectual Property Commission (CIPC).
Entities incorporated on and after the 24th of May 2023 are required to file the records of their beneficial owner within 10 days after their incorporation.
Entities incorporated before the 24th of May 2023 are required to file their Securities Register or Beneficial Interest Register (whichever is applicable to the entity in line with whether it is an Affected or Not an Affected entity) as part of their Annual Returns filing process from the 24th of May 2023.
Any changes to the beneficial ownership of an entity must be announced to the register within 10 business days.
The beneficial ownership information will not be accessible to the general public, unless the country comes to a different policy position.
A beneficial owner is defined as a natural person who, directly or indirectly, ultimately owns at least 5% of a company or exercises effective control over a company.
The risk of non-compliance
Failure to register the required information will be considered non-compliance with the Companies Act.
This could result in a court ordered administrative fine not exceeding 10% of the respondent’s turnover during the period of non-compliance or R1 million whichever is greater.
