Directors must take note of the amendments to the Companies Act 71 of 2008 (“the Act”)

published on 5 April 2023 | reading time approx. 2 minutes

Directors must take note of the amendments to the Companies Act 71 of 2008 (“the Act”)

A director must note and take into consideration the implications of the amendments to the Act published as part of the General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Act 2022, which forms part of the Country’s effort to combat money laundering, terrorist financing and other financial crimes:

Several definitions were are added to the Act, which include the definition of a beneficial owner;
Beneficial owner, in respect of a company, means an individual who, directly or indirectly, ultimately owns that company or exercises effective control of that company, including through-
the holding of beneficial interests in the securities of that company;
the exercise of, or control of the exercise of the voting rights associated with securities of that company;
the exercise of, or control of the exercise of the right to appoint or remove members of the board of directors of that company;
the holding of beneficial interests in the securities, or the ability to exercise control, including through a chain of ownership or control, of a holding company of that company;
the ability to exercise control, including through a chain of ownership or control, of-
- a juristic person other than a holding company of that company;
- a body of persons corporate or unincorporate;
- a person acting on behalf of a partnership;
- a person acting in pursuance of the provisions of a trust agreement; or
the ability to otherwise materially influence the management of that company.
The amendments to the Act will require that every company must maintain a register of the beneficial owners of the company as part of the securities register.

Every company must a file an annual return on the anniversary of the registration date at CIPC. The filing historically included the submission of the annual financial statement. With the amendments to the Act, a company would be required to file a copy of the securities register as well as a disclosure of the beneficial interest.
The list of grounds a person is disqualified from being a director, as been amdended and expanded on.

Several of the amendments came into effect on 31 December 2022 and most of the remaining amendments will come into effect from 1 April 2023.

Should you require any assistance with the maintance of the Company records or the required filings at the Companies and Intellectual Property Commision, fee free to contact our offices.