We have just been advised by the CIPC (the Companies and Intellectual Property Commission) that they are set to deregister over 500,000 companies and close corporations for failing to file annual returns and beneficial ownership declarations.
While deregistration for failure to provide annual returns has always been ongoing, failure to declare Beneficial Ownership is relatively new, the requirement having been created by FICA and greylisting-inspired amendments to our legislation in April 2023. Companies and trusts were identified as vehicles often misused in money laundering and possibly terrorism financing activities and the new legislation places greater compliance obligations on these entities. There is an explanatory annexure attached if you have a company, Close Corporation or Trust or manage an NPO.
Why is this relevant to property owners? Many residential property owners have chosen to register their homes in companies or trusts, and this is a heads up to check with your accountant that these annual returns and beneficial ownership declarations have been made and that your company is not under deregistration. Trusts are not registered with the CIPC, but the same beneficial ownership requirements apply to trustees and there are draconian penalties for the failure to file these declarations. With Trusts, beneficial ownership declarations were due by 15 November 2024 at all Masters Offices. There was also a tendency to register properties in close corporations in the building boom of the early 2000s and we still encounter properties registered like this. If such a close corporation (or any company owning property) has been deregistered by the CIPC, technically, the property has defaulted to the state and the entity is barred from transferring property whilst in a state of deregistration. From a conveyancing point of view the close corporation or company first has to be revived by your accountant which costs you in the vicinity of R20,000 and delays the conveyancing while this takes place.
Check now with your accountant!
Article shared from:
Miltons Matsemela Oosthuizen Inc.
