What Is a Beneficial Ownership Certificate?

As businesses face increasing compliance requirements, the need for transparency and accurate disclosure of beneficial ownership has become more critical. In South Africa, obtaining a beneficial ownership certificate is a key step in meeting these obligations. This certificate is a formal document that identifies the individuals who ultimately own or control a company. So, how do you get one? Let’s dive into the process and explore why it’s important.

A beneficial ownership certificate is an official document that verifies the beneficial owners of a company. Beneficial owners are individuals who:

  • Directly or indirectly own a significant percentage of the company’s shares (typically 25% or more);
  • Exercise substantial control or influence over the company; or
  • Receive significant benefits from the company’s operations, even without a formal ownership stake.

This certificate is often required for compliance purposes, particularly when dealing with regulatory authorities like the Companies and Intellectual Property Commission (CIPC), financial institutions, or during due diligence processes.

Steps to Obtain a Beneficial Ownership Certificate

  1. Understand the Legal Requirements
    • Familiarise yourself with the legal framework governing beneficial ownership in South Africa. The CIPC mandates that companies disclose their beneficial owners to promote transparency and accountability.
    • Ensure you understand the thresholds and criteria for identifying beneficial owners, such as the 25% ownership or significant influence rule.
  2. Identify Beneficial Owners
    • Conduct a thorough review of your company’s shareholding and management structure to identify individuals who qualify as beneficial owners.
    • Look beyond direct ownership to uncover indirect ownership through other entities or arrangements.
  3. Gather Required Information
    • Collect the necessary details for each beneficial owner, including:
      • Full name
      • Identification or passport number
      • Residential address
      • Date of birth
      • Nature and extent of their ownership or control
  4. Engage a Professional
    • Consult with commercial attorneys or corporate compliance experts to ensure that your documentation is accurate and complete. Professionals can assist in verifying the information and preparing the necessary paperwork.
  5. Prepare and Submit the Application
    • Submit the required details to the CIPC or other relevant authority through their designated platform.
    • Ensure you meet all submission deadlines to avoid penalties or non-compliance issues.
  6. Receive the Beneficial Ownership Certificate
    • Once the information is reviewed and approved, the CIPC or issuing authority will provide the beneficial ownership certificate. This document will confirm the details of the company’s beneficial owners.

Common Challenges in Obtaining a Beneficial Ownership Certificate

  1. Complex Ownership Structures:
    • Companies with multi-layered or international ownership structures may find it challenging to identify and verify beneficial owners.
  2. Data Privacy Concerns:
    • Disclosing personal information about beneficial owners can raise privacy concerns. It’s important to handle this data in compliance with applicable data protection laws.
  3. Regulatory Changes:
    • As compliance requirements evolve, staying updated on the latest regulations is essential to ensure accuracy in your disclosures.
  4. Incomplete or Inaccurate Information:
    • Missing or incorrect details can delay the issuance of the certificate or lead to compliance risks.

Why Is a Beneficial Ownership Certificate Important?

  1. Regulatory Compliance:
    • A beneficial ownership certificate ensures your company meets legal requirements, avoiding penalties and potential legal issues.
  2. Building Trust:
    • By being transparent about ownership, you enhance your company’s credibility with investors, partners, and regulatory bodies.
  3. Facilitating Business Transactions:
    • Many financial institutions and potential business partners require a beneficial ownership certificate as part of their due diligence process.

How Burger Huyser Commercial Attorneys Can Help

At Burger Huyser Attorneys, we specialise in corporate compliance and can guide you through the process of obtaining a beneficial ownership certificate. Our team offers:

  • Expert advice on identifying and verifying beneficial owners;
  • Assistance with preparing and submitting the necessary documentation;
  • Ongoing support to ensure compliance with evolving regulations.

By working with us, you can navigate the complexities of beneficial ownership with confidence, allowing you to focus on growing your business.

If you need help with obtaining your beneficial ownership certificate or understanding the requirements, contact Burger Huyser Attorneys today. Our experienced professionals are ready to assist you every step of the way.

Contact Burger Huyser Attorneys, and book a consultation.

To speak to one of our experienced attorneys in South Africa for immediate assistance, contact us on the numbers below:

Randburg call 061 516 6878; Roodepoort call 061 516 0091; Sandton call 064 555 3358;  Pretoria call 064 548 4838;

Centurion call 061 516 7117; Alberton call 061 515 4699; Bedfordview call 061 536 3223

DISCLAIMER: Information provided in this article does not, and is not intended to constitute legal advice. READ MORE