The Financial Action Task Force (FATF) is an intergovernmental body that develops and promotes policies to protect the global financial system. The FATF identified certain areas of deficiency in South Africa that had the effect of South Africa being grey-listed in March 2023. One of the areas of strategic deficiencies identified by the FATF requires South Africa to ensure that competent authorities have timely access to accurate and up-to-date Beneficial Ownership information on legal persons and arrangements.
What is a Beneficial Owner?
A Beneficial Owner is a natural person who, directly or indirectly, ultimately owns a specific company or exercises effective control of that company.
Who is a Beneficial Owner?
A Beneficial Owner is a natural person who owns 5% or more shares in a specific company.
Trusts or other entities cannot be a Beneficial Owners, as Beneficial Ownership focuses on the natural person benefiting from the shares of a company.
Beneficial Ownership registers and the CIPC.
The Companies and Intellectual Property Commission (CIPC) intends to implement a Beneficial Ownership (BO) register. The CIPC set a deadline of 6 months, from 1 April 2023, for all companies to submit their Beneficial Ownership documentation on the CIPC Beneficial Ownership Portal.
It is important to note that the filing of Beneficial Ownership documentation does not replace the filing of the CoR39 (change of directors). The Beneficial Ownership filing deals with the unknown owners who ultimately own a legal entity or exercise effective control of an entity. In contrast, the CoR39 deals with the directors tasked with the day-to-day business and affairs of the company.
If a trust owns shares in a company, the CIPC requires that all the trust documentation must be filed with them. They require documentation to prove who the beneficiaries and trustees of the trust are.
In addition, the trust documentation should also be filed with the Master of the High Court.
What if a company doesn’t file their Beneficial Ownership documentation?
The relevant legislation will set sanctions in terms of fines or imprisonment when it is set in place.
In conclusion, beneficial owners are anyone who owns 5% or more shares in a company. All companies must file their Beneficial Ownership documentation before the deadline of 30 September 2023 to avoid the risk of fines or imprisonment.
SEESA Compliance and Transparency assists companies with the filing of their Beneficial Ownership documentation to ensure compliance with the relevant legislation.
See how we can give you Peace of Mind: www.seesa.co.za