How does beneficial ownership work?

CIPC has incorporated a new process where companies need to submit their beneficial ownership to CIPC. This basically contains the details of any shareholder which holds more than 5% shares in a private company, or has more than 5% membership in a close corporation. This refers to amendments of the companies act 71 of 2008. Failure to submit the information will put the company in violation of the companies act of South Africa. The beneficial ownership falls into 2 categories, namely:

Affected companies

Affected companies refer to private companies who are controlled by or is a subsidiary of a regulated company.

Non affected companies with beneficial ownership

This is the category will will affect a lot of small businesses. The beneficial ownership refers to anyone who has:

• Owns more than 5% shares of the company
• Having control over voting rights or control over the exercise of voting rights associated with securities of a company
• Exercising the right to appoint/remove members of a company’s board of directors or having control over the exercise of the right to appoint/remove board members

Non-Profit Companies

All non-profit companies need to submit a register of their members to CIPC.

What information is needed by CIPC?

The following information needs to be submitted for the beneficial ownership declaration at CIPC for every person with interest in the company, together with a security register:

• ID copy
• Email address
• Personal income tax number
• Ownership percentage

When must the detail of the beneficial ownership be submitted to CIPC?

All companies registered after 24 May 2023 must file the information as part of their annual returns. If there is a change in the interest of the company, it has to be filed with CIPC within 10 days.

We can assist you with submitting the detail to CIPC at a cost of only R250, simply click on the link below:

Beneficial Ownership