Proposed Amendments to South African Companies Act

The draft General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Bill [B-2025] proposes changes to the South African Companies Act, 2008 aimed at enhancing enforcement of obligations to file securities registers and registers of disclosure of beneficial interest with the Companies and Intellectual Property Commission (CIPC).

Key Takeaways:

• Risk of Deregistration: The CIPC will be empowered to deregister any company that fails to submit the abovementioned registers for two or more consecutive years.
• Direct Administrative Penalties: For the first time, the CIPC will have the authority to impose administrative penalties directly for non-compliance with compliance notices. Currently only a court can impose administrative fines for non-compliance with CIPC compliance notices.
• Substantial Financial Exposure: The maximum potential fine is set at the greater of 10% of the company's annual turnover during the period of non-compliance or a minimum prescribed amount of R10 million.
• Tribunal Oversight: To ensure fairness, the Companies Tribunal will have the power to review any decision made by the CIPC regarding these new administrative penalties.

Beneficial interest vs beneficial ownership: All “affected companies” (regulated companies and their subsidiaries) must establish and maintain registers of beneficial interest. Other companies must record in their securities registers prescribed information regarding the natural persons who are the beneficial owners of the company. For further information on this see Changes to the South African Companies Act.

Recommendation: Given the potentially severe penalties, it is essential to verify that all securities and beneficial interest registers are current and correctly filed with the CIPC. Ensuring compliance now will mitigate the risk of high-value fines or company deregistration, if these amendments are enacted as proposed.