What is beneficial ownership and why should you care?

If you're a business owner in South Africa, you must pay attention to the words "beneficial ownership." It's one of the biggest things that will affect your business and ultimately, your income.

The Financial Action Task Force is an international group of organisations that makes the rules and regulations to prevent money laundering and terrorist financing. In a nutshell, they decide what the rules are for the flow of money in and between countries.

But why is this affecting businesses in South Africa? In February 2023 South Africa was placed on the grey list because the FATF identified 22 technical deficiencies that allowed the flow of money without financial institutions taking steps to prevent or deter these transactions. South Africa has been given until October 2024 to put measures in place to prevent the financing of serious crimes like terrorism. 

The Beneficial Ownership Register is one of these measures. The Companies Intellectual and Properties Commission, the CIPC, launched its BO Register in April 2023 where companies must list everyone who owns shares or controls that company. This is to find out who the owners of a company are and who's making money from the business. It's also to trace the flow of money when money laundering or any other illegal activities are suspected.

From May 2024 companies won't be able to file annual financial statements with the CIPC if they haven't submitted their Beneficial Ownership information. It is now required by law that entities must disclose who owns what in a private or public company, or a non-profit organisation. 

This affects every business owner in South Africa and it's part of being compliant and to keep on operating your business. 

Many business owners in South Africa, unfortunately, are not aware of the implications of not filing the Beneficial Ownership. It might seem like an extra administrative burden on companies, but the CIPC is trying to make it as seamless as possible to file. The process can be completed online and requires specific documentation to be submitted. Once the Beneficial Ownership has been filed and accepted, CIPC will issue a certificate that can be downloaded and kept in a safe place. 

This process needs to be repeated every year, even if there were no changes in ownership or shareholders.

If all of this feels overwhelming, we are also here to help you file your Beneficial Ownership, so you can breathe easier.

File your Beneficial ownership today. Call us or WhatsApp us on 064 049 0308 and let us help you.

If you're facing similar challenges in managing your finances, I'd be happy to assist you. As an accountant, I can provide tailored solutions to your specific needs. Please feel free to contact me for a consultation at profitsandbooks@gmail.com or +2764 049 03038

Disclaimer

The information provided in this blog post is for informational and educational purposes only. It is not intended to be a substitute for professional advice, including financial advice. While all efforts have been made to ensure the accuracy of the information, errors or omissions may occur. Please consult with a qualified professional for advice tailored to your specific circumstances.   The author and publisher of this blog post disclaim all liability for any loss or damage caused, directly or indirectly, by the use of or reliance on any information contained herein.