In brief

The Companies and Intellectual Property Commission (CIPC) has issued several notifications that are of high importance to businesses with operations in South Africa.

The notifications concern:

• A security compromise as per section 22 of the Protection of Personal Information Act (2013)
• Processes regarding the proof of physical address of companies and close corporations in South Africa
• More information concerning the Annual Return Deregistration Process of Companies and Close Corporations
• Details of the delays expected in processing company and close corporation re-instatement applications and responding to enquiries
• Information concerning the Beneficial Ownership Reviewer System
• Details regarding integration of the Foreigner Assurance Process with Beneficial Ownership.

Clients are urged to take note of these developments and to get in touch with their Baker McKenzie contact should they require assistance in this regard.

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Contents

1. 29/02/2024 – Notification of security compromise as per section 22 of the Protection of Personal Information Act, 4 of 2013
2. Practice Note 1/ 2024 – Proof of physical address of companies and close corporations
3. Notice 3/ 2024 – Deregistration of Companies and Close Corporations in Annual Return Deregistration Process
4. Notice 9/ 2024 – Delay in processing company and close corporation re-instatement applications and responding to enquiries
5. Notice 12/ 2024 – Beneficial Ownership Reviewer System
6. Notice 13/ 2024 – Foreigner Assurance Process Integration with Beneficial Ownership

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This alert highlights several important notices issued by the Companies and Intellectual Property Commission (CIPC) which require the urgent attention of businesses with operations in South Africa.

29/02/2024 – Notification of security compromise as per section 22 of the Protection of Personal Information Act, 4 of 2013

The Companies and Intellectual Property Commission (CIPC) has noted an attempted security breach and the compromise of personal information of clients and CIPC employees, held on the CIPC records database.

ICT technicians were immediately alerted due to the extensive firewall and data protection systems in place and certain CIPC systems were shut down immediately to mitigate any possible damage. Through the efforts of the ICT and information security teams, the compromise was isolated and curtailed and the relevant systems are running again.

However, it has been noted that certain personal information of CIPC clients and employees was unlawfully accessed and exposed. CIPC clients are urged to be vigilant in the monitoring of credit card transactions and to only approve/authorise known and valid transaction requests. The extent of the exposure is being investigated and will be communicated as soon as possible.

The CIPC noted the importance of the consistent availability of its systems and the safeguarding of information that is not in the public domain and is working actively to minimise the impact on CIPC clients and employees.

Practice Note 1/ 2024 – Proof of physical address of companies and close corporations

This notice was issued in terms of Regulation 169(1) of the Companies Regulation, 2011, Section 23(3) of the Companies Act, 2008 (Act 71 of 2008), which states that each company or external company must continuously maintain at least one office in the Republic of South Africa and register the address of its office, or its principal office if it has more than one office.

As part of the CIPC’s drive to ensure the correctness and reliability of submitted information, it now requires certified evidence of the registered address or its principal office to be submitted with the following applications, as of 1 March 2024:

• Registration of External Company
• Long Standard Form Profit Companies
• Long Standard Form Non-Profit Companies without members
• Long Standard Form Non-Profit Companies with members
• Application to Convert a Close Corporation
• Application to Transfer Registration of Foreign Company

Notice 3/ 2024 – Deregistration of Companies and Close Corporations in Annual Return Deregistration Process

The CIPC has deregistered companies and close corporations that have been in the Annual Return Deregistration process for more than three years, and for which the notification process as per Companies Regulation 40 has been completed. The systematic final deregistration took place in the period 19 – 23 January 2024, with the notification of final deregistration having followed that process.

Companies and close corporations that have been finally deregistered may apply for re-instatement provided they meet the process and documentation requirements. Once the re-instatement has been processed, all annual returns together with the latest Beneficial Ownership Declaration and Annual Financial Statements/Financial Accountability Supplement must be filed within 30 business days.

Important Information:

• The submission of the Annual Return Information together with payment, should have been made before final deregistration. The timeous payment or deposit of a fee are not regarded as filing of Annual Returns. If payment or deposit was made, but the company or close corporation was finally deregistered, the company or close corporation may be re-instated, provided it meets the process and document requirements.
• If Annual Returns were filed, but not the latest Beneficial Ownership Declaration, this must be filed separately, failing which the CIPC may initiate an investigation against the company or close corporation and issue a compliance notice.
• Technical questions on Beneficial Ownership must be logged via the CIPC enquiry system – Department Corporate Legal Services and the Category Beneficial Ownership.
• Names of companies and close corporations which were finally deregistered between 19 and 23 January 2024 for Annual Return non-compliance, will be administratively protected for a period of six months only. After which the name will become available for other customers to reserve.
• Technical questions on Annual Financial Statements or Financial Accountability Supplement must be logged via the CIPC enquiry system – Department Companies and Close Corporations, and the Category Financial Statements or iXBRL fault logging.

Notice 9/ 2024 – Delay in processing company and close corporation re-instatement applications and responding to enquiries

Due to the final deregistration of companies and close corporation for non-compliance with Annual Returns during January 2024, high volumes of re-instatement applications and enquiries relating to deregistrations and reinstatements have been experienced by the CIPC.

Due to these high volumes, the CIPC has noted the following delays:

• Company and Close Corporation re-instatement applications (10 working days from date of tracking).
• Company and Close Corporation Deregistration Enquiries (service standard is 10 working days from logging the enquiry).
• Company and Close Corporation Re-instatement Enquiries (service standard is 10 working days from logging the enquiry).

Notice 12/ 2024 – Beneficial Ownership Reviewer System

The Financial Action Task Force (FATF) recommendations pertaining to beneficial ownership transparency within South Africa, resulted in amendments to the Companies Act, 71 of 2008 (amongst other pieces of legislation), brought about by the General Laws (Anti-Money Laundering and Combatting Terrorism Financing) Amendment Act, 22 of 2022.

Subsequently, the CIPC launched its Beneficial Ownership Register on 1 April 2023, allowing all corporate vehicles registered with the CIPC to file their beneficial ownership declarations. In the latest development, the CIPC Beneficial Ownership Reviewer System has now been rolled out, allowing for the examination and review of sample Beneficial Ownership filings as well as assisting and advising corporate vehicles on the correctness and accuracy of their filings.

This system provides businesses in South Africa with an opportunity to correct any mistakes and ensure compliance with the legislation. Beneficial ownership filings that are rejected/queried for whatever reason, may be re-filed. Filers will be notified via email of any need for re-filing, once applications have been examined.

The CIPC noted that providing an opportunity for compliant corporate vehicles to re-file where bona fide mistakes were made, assists in moving South Africa closer to being off the FATF grey list.

Notice 13/ 2024 – Foreigner Assurance Process Integration with Beneficial Ownership

In December last year, the CIPC launched the online Foreigner Assurance service on CIPC’s e-Services platform. The foreigner assurance process allows foreign nationals to submit their information electronically, together with a certified copy of their passport/foreign identity document, for manual assurance or verification before they can transact with the CIPC on the various platforms.

The integration of the Foreigner Assurance process with the submission of Beneficial Ownership and associated information and/or documents was announced in February 2024. The Foreigner Assurance Beneficial Ownership integration marks another step in the validation and verification process, to ensure correct, accurate and up-to-date information is held on the CIPC registers.

Foreign national information is only accepted and processed via the CIPC e-Services platform. The step-by-step Guide on the Foreigner Assurance service is available on the CIPC website, here.

*We wish to thank Promise Ndlovu, trainee in Johannesburg, for his work on this article.