Unprecedented move by SA Government to expose Shareholders in Private Companies and Trust Beneficiaries 

Ownership of shares in proprietary limited companies has always been private by definition, and thus an attractive vehicle for shareholders in South Africa seeking relative anonymity.      

However, the Department of Trade, Industry and Competition (DTIC) issued an unprecedented directive requiring all companies disclose and submit beneficial ownership details with the Companies and Intellectual Property Commission (CIPC) by 30th of September 2023. A beneficial owner is defined as any natural person holding as little as 5% equity in a legal entity!   

The alleged rational was to garner information and utilise it to combat, money laundering, financing of terrorism and corruption. The more likely motivation is the garnering of information for the grabbing of funds from shareholders and beneficiaries by the tax collectors.  

Similarly, the powers that be have introduced a new definition of “beneficial ownership” in the Trust Property Control Act giving rise to the need for a beneficial ownership register of the Master of the High Court. 

Whilst the CIPC has directed further that noncompliance is an offence in terms of the Companies Act, warranting the imposition of a fine and/or imprisonment, radical legislative departures like these are customarily followed by a voluntary disclosure program. Given the dire consequences, watch this space!    

 The good news is that its proverbial bark is worse than its bite as disclosure is capable of not only being deferred but avoided!  

To find out how contact us now.  

KWP’s company and commercial law department : (+27 (0)11 789 1783 / commercial@kwplaw.co.za).