Beneficial Ownership

What is beneficial ownership?

This is basically a process created by CIPC where you have to declare the shareholders’ details for your business.

Who needs to submit their beneficial ownership details?

The following type of companies need to submit their details to CIPC:

  • Profit companies
  • Non profit companies
  • External companies
  • Close corporations

The requirement to submit falls into two different categories:

Affected companies

An “affected company” is a regulated company as set out in section 117 (1) (i) of the Companies Act and a private company that is controlled by or is a subsidiary of a regulated company.

Non affected companies

These refer to any other business that does not qualify under the definition of an affected company, but there is a shareholder or shareholders that owns more than 5% of the total company shares.

When should I submit and what happens if I don’t?

All existing companies should submit their beneficial ownership details to CIPC immediately. Newly registered companies should submit within 10 days of registration of the company. CIPC has indicated that they will send compliance notices to companies who do not submit their details. In some cases they will even go so far as to deregister the company, which can cause the bank to freeze the business’ bank account.

Conclusion

The majority of small businesses will have to submit their beneficial ownership details. It’s only in rare cases where a small business have a high amount of shareholders where not one owns more than 5% of the total shares.

If you need assistance with submitting your details, click here.

beneficial ownership

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