The General Laws Amendment Act, focused on Anti-Money Laundering and Combating Terrorism Financing, was enacted on 29 December 2022. This law has brought about several modifications to beneficial ownership structures to unify the definition of a beneficial owner across multiple Acts, including the Companies Act. The revised Companies Act defines a beneficial owner as an individual who possesses or exercises “effective control” over a company, directly or indirectly. Under the terms of these amendments, businesses must initiate preparations to adhere to the enhanced disclosure obligations related to company beneficial ownership declarations.
Company Beneficial Ownership Declarations
Complex corporate structures are often utilised for legitimate reasons, such as preserving the confidentiality of wealthy individuals and their families or addressing the inherent dangers linked to large family businesses. However, these frameworks can also be exploited to cover unlawful activities, including money laundering, fraud, and tax evasion. Effective law enforcement relies on the ability to procure accurate beneficial ownership data from responsible institutions. As a result, they face significant challenges from this absence of transparency – furthering the need for opaque corporate structures.
There has been a growing demand for beneficial declarations to guarantee that institutions can access accurate, up-to-date, and verified beneficial ownership information to strengthen the battle against financial crime, and hence the introduction of a Beneficial Ownership Register, which is populated through the Company Beneficial Ownership Declaration process.
The objective of this register includes:
- Establishing a database of natural persons who possess or control legal entities.
- Providing law enforcement agencies with pertinent information to assist in their investigations.
- Reducing the risks identified in the national risk assessment, where legal persons were recognised as susceptible to exploitation for financial crimes.
Easy Company Beneficial Ownership Declarations with LMS
The CIPC maintains records of legal owners but does not document company shareholders and beneficial owners. The General Laws Amendment Act aims for the CIPC to maintain a registry containing precise and current beneficial ownership data. Any failure to register this information will be considered non-compliance with the Companies Act and may lead to an administrative fine.
The following entity types are required to file beneficial ownership declarations, if applicable:
- Profit companies
- Non-profit companies
- External companies
- Close Corporations
Applicable fees:
Starting from R950 (ex VAT)
LMS can assist businesses in navigating the complexities of filing their company beneficial ownership declarations. Our team understands the requirements and processes involved in submitting accurate and up-to-date information to the CIPC. Working with LMS allows you to enjoy ongoing support and ensure your business remains compliant to avoid potential fines or penalties.
Frequently Asked Questions
