In an attempt to combat corruption, fraud and money laundering, the General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Act 22 of 2022 has amended inter alia, the following legislation, introducing the concept of "Beneficial Ownership", and with it, certain mandatory disclosures in respect of same:
1. The Companies Act 71 of 2008:
The following entities are henceforth required to file Beneficial Ownership information with the Companies and Intellectual Property Commission (CIPC):
- Profit companies;
- Non-profit companies;
- External companies; and
- Close Corporations.
Please see below Customer Notice 5 of 2024 issued by the Companies and Intellectual Property Commission.
As of 1 April 2024, the Commission will be introducing a hard-stop functionality that will prevent entities which have not complied with Beneficial Ownership filing requirements from completing the process of filing annual returns. Deregistration is also a certain reality for non-compliant entities.
Failure to comply may also result in a compliance notice being issued in terms of section 171 of the Companies Act and an administrative penalty of over R1 million or 10% of the entity’s turnover, whichever is greater, may be imposed in terms of section 175 of the Companies Act in the case of non-compliance.
2. The Trust Properties Control Act 57 of 1998:
Trustees are now compelled to establish and maintain a record of beneficial ownership within the trust which they are required to be lodge with the Master of the High Court.
Moreover, trustees are required to record detailed information regarding accountable institutions they engage with for trust property management.
Non-compliance with the new regulations carries severe penalties, potentially leading to a fine of up to R10 million, imprisonment for a maximum of five years, or both.
3. The Financial Intelligence Centre Act 38 of 2001:
New entities are now included under the Act and deemed to be accountable institutions, mandated to register with the Financial Intelligence Centre.
Failure to register may result in imprisonment for a period not exceeding five years and/or a fine not exceeding R10 million.
