top of page
Search

CIPC’s New Beneficial Ownership Requirement - a grudge purchase?


ree

CIPC has fundamentally changed how annual returns are filed in South Africa. As of 2023, no annual return can be submitted unless a company has filed its Beneficial Ownership (BO) information.This change has caught many business owners off guard — especially those who previously relied on their accountant to handle annual returns as part of a retainer.

This blog explains what has changed, what information is now required, and why you may need to pay extra for your accountant to complete the new compliance work.


1. What Beneficial Ownership Information Must Be Submitted?

CIPC now requires all companies to disclose the natural persons who ultimately own, control or benefit from the entity. This is different from simply listing “shareholders.”

For each beneficial owner, CIPC requires detailed, verified data, including:


Mandatory Information

  • Full name and surname

  • ID number or passport number

  • Date of birth

  • Citizenship

  • Residential address

  • Contact details

  • The percentage of ownership or control

  • Nature of control (e.g., shareholding, voting rights, beneficiary of a trust, indirect ownership through another entity)

  • Supporting documents (ID copy, share certificates, trust deeds, resolutions, etc.)


Why This Often Isn’t Available

Most small and medium companies do not have:

  • Updated share registers

  • Share certificates

  • Resolutions for share transfers

  • Trust documents

  • Accurate ownership structures

  • Records showing indirect or historical ownership


If these documents are missing, your accountant must reconstruct the full statutory record, including:

  • Rebuilding or correcting the share register

  • Recreating missing resolutions

  • Checking historical changes

  • Tracing ownership through holding companies or trusts

  • Ensuring the register complies with the Companies Act and FATF rules


This is technical, detailed, compliance-sensitive work — and not something CIPC allows to be done superficially.


2. Why Annual Return Filings Included in Your Retainer No Longer Cover Beneficial Ownership

Many accountants traditionally included annual return submissions in their monthly retainer.However, the retainer never included the extensive, completely new BO compliance requirements because:

  • BO filing did not exist before 2023

  • It requires far more work than completing a standard annual return

  • It often involves multiple hours of document reconstruction

  • It carries higher professional liability and compliance risk

  • It is now a legal requirement linked to FATF greylisting, with penalties for incorrect information


Why this results in additional fees

Completing a simple annual return takes ±15–20 minutes.Completing BO compliance often takes 1–5+ hours, depending on how accurate the company’s statutory records are.

Your retainer fee covered:

  • Basic annual return submissions

  • General statutory updates

It did not cover:

  • Building or reconstructing statutory registers

  • Tracing beneficial owners

  • Submitting BO records

  • Resolving CIPC system rejections

  • Managing ongoing BO amendments

  • Verifying identity documents and control structures

In short:

CIPC added a completely new regulatory requirement, and accountants must charge for the significant extra work involved.

3. Why You Still Need to Pay Your Accountant — Even If It Feels Like a Grudge Purchase

Many business owners feel BO filing is a “grudge purchase” — and that is understandable.You are paying for something that doesn’t feel immediately valuable.But here’s why it matters.


Why you are paying your accountant

  1. The law requires accurate BO informationIncorrect filings expose directors to liability and potential penalties.

  2. CIPC will not accept your annual return without BOMeaning:

    • You cannot obtain your Certificate of Confirmation

    • Your company becomes non-compliant

    • You will be blocked from tenders, banks, and supplier registrations

  3. Accountants protect you from mistakesBeneficial ownership information must be accurate, verifiable, and aligned to the Companies Act.Mistakes can lead to:

    • CIPC rejections

    • Compliance flags

    • Future audit issues

    • Difficulties selling or restructuring the business

  4. BO records must match your statutory documents exactlyIf your share register is wrong, outdated or missing (common in SMEs), your accountant must repair it before filing.

  5. Accountants take on the compliance riskCIPC’s BO rules form part of South Africa’s anti-money laundering framework.Incorrect filings can expose the professional to disciplinary or regulatory risk — and accountants must protect both you and themselves.

  6. You are paying for time, expertise and accuracyNot just for pushing a button on the CIPC system.


A grudge purchase? Yes.But a legally mandatory one — and a critical part of keeping your company compliant and able to trade.


Final Thoughts

CIPC’s integration of Beneficial Ownership into the annual return process is one of the most significant compliance changes in recent years.Understanding what information is required — and why accountants must now charge extra — helps avoid unnecessary frustration and keeps your company protected.

 
 
 

Comments

bottom of page