Accountability and Transparency of Companies
The New Companies Act of 2008 provides for a series of duties and responsibilities of all Companies. All companies are required to:
- Have a registered address (office) within the Republic of South Africa. Sect 23 specifically refers to the responsibility of external companies to have a registered office;
- Maintain records for a minimum of 7 (seven) years in written form. If a company has existed for a shorter time period than the records need to be kept for that time period;
- Have a fixed financial year, ending on a date set out in the company’s Notice of Incorporation, subject to any change made in terms of Sect 27(4);
- Keep and maintain accurate and complete accounting records in one of the official languages of South Africa;
- Prepare annual financial statements within 6 (six) months after the end of its financial year end. Such financial statements must satisfy the financial reporting standards.
- The annual financial statements of public companies will require an audit;
- Other companies must be audited if it falls within a category prescribed by the Minister or be independently reviewed in terms of Sect 30 7(a)&(b);
- Private companies which have only one beneficial shareholder , are not required to have an audit or independent review;
- It is assumed that state-owned companies are also required to be audited. Although the Act is silent regarding this duty, Sect 90 states that a state-owned company must have an auditor;
- File an annual return in the prescribed form with the prescribed fee. In addition, a public company and state-owned company must also comply with the extended accountability requirements set out in Chapter 3 of the Act.