Amendments to Companies Act on the cards
10 Jul 2023
The trade, industry and competition department announced that amendments to the Companies Act are on the cards during a briefing in parliament in a response to the grey listing of South Africa by the Financial Action Task Force (FATF) and the progress on the State Capture Commission reports.
The Zondo Commission recommended that Section 162 of the Companies Act be amended for “time bar to permit applications to have directors declared delinquent, to be brought even after two years on good cause shown”.
“Two options are being considered: either to add the amendments to the current review of the Companies Amendment Bill or to consider this in the next Companies Act legislative review.”
As regards grey listing, the department pointed out that the General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Act of 2022 amends the Companies Act on matters related to the definition of beneficial owner and the requirement to compile and maintain a register of the “beneficial owners”.
According to the department, the registers will be accessible to law enforcement agencies when carrying out investigations into money laundering.
The Companies and Intellectual Property Commission (CIPC) is the regulatory entity in the department that will enforce the law.
The department highlighted that the CIPC is implementing Phase 1 of a standalone Beneficial Ownership Register.
“The Data on Beneficial Ownership for all entity types where ownership is 5% and above will be made available to law enforcement, competent authorities and prosecuting authorities to support prosecution through the country’s courts.”
Companies Amendment Regulations were published in May 2023.
The department pointed out that the regulations provide for a Beneficial Ownership Register to be kept by companies and the CIPC and will be available for use by law enforcement agencies.
“The publication of the regulations is the first phase of a wider reform to introduce greater transparency in beneficial ownership and interests held by natural persons in companies.”
The department declared that further changes are being considered as part of amendments to the Companies Act currently under development.
- Significant developments in reporting beneficial ownership
- General Laws Amendment Act – Is your company prepared?
- What are Ultimate Beneficial Owners (UBOs) and why do they matter?
- Removal of a director by shareholders of a company: reasons not necessarily to be provided