Beneficial Ownership
Understanding Beneficial Ownership
The Beneficial Ownership Declaration is a regulatory requirement introduced by the Companies and Intellectual Property Commission (CIPC) to identify the individuals who ultimately own or control a corporate entity, whether directly or indirectly. This regulation stems from the General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Act 22 of 2022, which amended the Companies Act 71 of 2008 and took effect on 1 April 2023. The purpose of this requirement is to provide authorities with critical information to combat money laundering, financial crimes, and reputational risks.
Why Compliance Matters Failure to file the necessary Beneficial Ownership information can lead to serious consequences, including compliance notices, administrative fines, investigations, and even the disqualification of directors. From 1 July 2024, a strict enforcement mechanism has been introduced, making it mandatory to file beneficial ownership details within the same calendar year as the company’s annual return filing. Non-compliance will prevent the submission of the annual return, impacting the company’s legal standing.
Who Qualifies as a Beneficial Owner?
A beneficial owner is any individual who directly or indirectly holds a beneficial interest of 5% or more in a company. This includes:
- Individuals who own 5% or more of the issued shares.
- Companies with beneficial owners holding 5% or more in the original company (including foreign companies).
- Trusts where beneficiaries hold a significant interest.
Staying compliant with Beneficial Ownership regulations is essential for maintaining business integrity and avoiding regulatory penalties. Let us assist you in ensuring your company meets all legal requirements efficiently!