Hidden in the SABC News interview with the CIPC Commissioner Advocate Roy Voller, was an interesting and profound change relating to reinstatement. Previously (and still, according to CIPC website) if the company was not trading when it was deregistered and did not own fixed property, it was not possible to reinstate it. That restriction has now, apparently, been removed. Whether they have simplified to whole process of restoration or not is unclear and we are still trying to find out. In any event, before you rush off to your service provider to get your company back from final deregistration, you…
Company Secretarial
I guessed right. CIPC are now sending out warnings and in them they state that the Beneficial Ownership return must be submitted annually. The reason that I saw this coming is that they used to insist on a CoR30.2 Financial Accountability Form before you could submit your Annual Return. Then about 18 months ago, the CoR30.2 disappeared and you could submit your Annual Return without it. What they were clearly doing was hacking their own software so that instead of forcing you to submit a CoR30.2, they could use it to force you to submit a Beneficial Ownership Return.
It’s quite shocking. The General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Act was promulgated in December 2022. It required that all companies submit a Beneficial Ownership Return to CIPC. We have over 100 shelf companies and, like a good Boy Scout, I personally submitted the returns for all of them. In each case I received an email from CIPC confirming the submission. On July 1 2024, they introduced a mechanism that stops you submitting your Annual CIPC Return unless you’ve submitted your Beneficial Ownership Return and guess what? Every one of our shelf companies is being blocked, because…
The General Laws (Anti Money Laundering and Combating Terrorism Financing) Amendment Act was a futile attempt to avoid our being grey listed. It became law in December 2022 and requires that all companies submit their Beneficial Ownership return to CIPC, and to re-submit whenever this information changes. CIPC have almost got it together and we’ve been able to submit the return for all our (over 100) shelf companies. That was pretty easy, because I’m the only shareholder, so they were all the same. Companies owned by shareholders who are natural persons are, actually, relatively easy once you have cracked the…
I referred to the new anti-money laundering act in an earlier post regarding trusts. The same Act amends the Companies Act to require the reporting of beneficial ownership (essentially the shareholders) of all companies to CIPC. Interestingly, the Master of the High Court has already published their requirements on their portal CIPC have also added the facility to their website, but at my last try it didn’t work. One side effect of this is that those of you who are employees who are not allowed by their employer to run a business will now no longer be…
When the new Companies Act came into effect back in 2010, it ceased to be possible to form a CC, but existing CCs were, and still are, allowed to remain in that form. What many people don’t realise is that a CC is not the best form of business entity. It has been surpassed by the (Pty) Ltd company. The main differences are – nobody knows who are the shareholders (owners) of a company. This information is not registered with CIPC, only on the share register at the registered office of the company. the members (owners) of a CC are…
When planning an Asset for Share swap using the s42 provisions in the Income Tax Act, you will see that the shares have to be new issues, not existing shares. As we invariably want all of the shares to be owned by a trust, we find it best to use a new company. The way an Asset for Share swap works is the new company issues 100% of its shares to the trust in return for an asset or assets (usually fixed property). There is no tax against this transaction. No CGT, no Transfer duty, no tax. There are, however,…
I get so many people asking me why we have not registered them as shareholders at CIPC, it’s time to explain. Members of CCs are registered at CIPC (because they are, amongst other things, “directors” of the CC). Directors of companies are registered at CIPC. Shareholders are not registered anywhere, except in the share register. The share register is usually an Excel sheet filed on the server at the registered office of the company. That’s it! There’s the only place you will find the shareholders. A share certificate is issued by the company secretaries to the shareholder and…
When a company or CC has failed to submit Annual returns, CIPC marks them “In de-registration process”. To return to “In Business”, we simply have to submit the outstanding returns. Then, periodially, CIPC will Finally de-register those companies and it is usually impossible to restore them. CIPC has just given notice of its intention to finally de-register all companies that are in de-registration process. If yours is one of them and you don’t want to lose it, get hold of us at 011 805 0030 urgently.
(Pty) Ltd companies must have at least one director, and he/she has to be appointed when the company is formed. Interestingly, however, a (Pty) Ltd company does not have to have any shareholders. It is formed with an authorised capital, usually of 1000 shares. That is capital (shares) that the director(s) are authorised, but not obliged, to issue. This is an advantage for us when we form a new trust and a new company that is to be owned by the trust. We can form the company, usually within about 1 week. The director…
The classifications NPC, PBO, NGO and NPO as well as EI all refer to entities that are not intended to make profits for their shareholders, but the acronyms certainly cause a lot of confusion. Here’s what they mean and how they relate to each other. The term Non Profit Company (NPC) came with the new Companies Act of 2018. It replaced what were know as s21 companies, which were formed under section 21 of the old Act. It is a company registered with CIPC and its essential features are There must be at least three independent incorporators It must be formed…
Annual Returns to CIPC are due during the month following that of the anniversary of the date of Incorporation (nothing to do with the Financial year end). If returns are not submitted, the company or CC will be de-registered by CIPC. When that happens, we have to apply to restore (actually reversing the de-registration). This is now either impossible or a nightmare process including advertising in the newspaper and other demanding requirements. Only after restoration are we able to determine which Annual Returns are outstanding and then submit the outstanding returns and pay the late fees. CIPC charge a fee based…
I guess you know that if you don’t submit your CIPC Annual Return for your company or CC for two years running, they’ll automatically de-register it. But did you know that from 1 November 2012, the re-instatement requirements became almost impossible to satisfy? Here they are – 1) Certified copy ID of director/member 2) Certified copy ID of person making the application 3) Deed search (reflecting ownership of immovable property or not) 4) Letters from National Treasury and the Department of Public Works, indicating that such departments have no objection to the re-instatement, if it has immovable property. (My emphasis) 5)…
I could almost say none! But that is a gross over simplification. However, there are some serious misperceptions out there, so let’s take a look at them – Companies have to be audited, CCs don’t. Wrong. A company (and a CC) has to be audited if its Public Interest Score (PIS) is 350 or more. That translates to a turnover of say, R300m and a staff compliment of say, 50 people. Companies have to have their Financial Statements reviewed, CCs don’t. Right, if their PIS is less than 350 (I’m simplifying a bit). But CCs need to have their Annual…