The Companies and Intellectual Property Commission (CIPC) plays a crucial role in maintaining the integrity of the South African business environment by ensuring compliance with relevant laws and regulations. On 25 February 2023, the CIPC announced that it will implement a beneficial ownership (BO) information register, commonly known as the UBO register, from 1 April 2023 . This register will require companies and trusts to disclose information about their ultimate beneficial owners (UBOs).
The UBO register contains information about the individuals who ultimately own or control an entity. By identifying and registering UBOs, the CIPC aims to increase transparency around who owns and controls companies in South Africa and to prevent the abuse of corporate vehicles for illegal activities such as money laundering and terrorism financing. The UBO register is not unique to South Africa and is already mandatory in many other countries.
Companies and trusts are now required to register their UBO information with the CIPC, and failure to do so will result in non-compliance with the Companies Act, which could lead to court-ordered penalties.
To assist you in completing your UBO register, you will need to provide details such as the name, identity number, and nationality of the ultimate beneficial owner, as well as the nature and extent of their interest in the entity. While the UBO register is intended to increase transparency and accountability, it is important to note that the information provided will be confidential and only accessible to authorised parties.
Non-compliance with the UBO registration requirements can have serious consequences for companies and trusts. As of April 1, 2023, entities that fail to register their UBO information will be considered non-compliant with the Companies Act, and may face financial penalties and other legal consequences. Therefore, it is important for you to make contact with our offices, without delay, to ensure you comply.
While the UBO register may increase transparency and accountability, it also presents challenges for SME businesses in terms of compliance. Compliance with the UBO register requires businesses to identify and verify their ultimate beneficial owners and provide the necessary information to the CIPC. This process can be time- consuming and costly, particularly for businesses that may not have the resources to implement the necessary compliance measures.
We do hope that this initiative will have a positive impact on investment and economic growth in South Africa. Open access to timely and accurate identifying information on the UBO of corporate entities would be a force for good in attracting investment to South Africa.
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8 May 2023