Ruling by the high court regarding a claim of confidentiality in terms of S212 of the companies ACT, ACT 71 OF 2008 as amended G.U.D Holdings high court review ruling, case no 26738/2022.

by | Feb 7, 2024 | Notices

Background

The Gauteng High Court in the matter between CIPC, the Companies Tribunal and G.U.D Holdings (Pty) Ltd ruled in favour of CIPC. It was a review application lodged by CIPC for review of a decision taken by the Companies Tribunal relating to the Commissions response to G.U.D’s claim of confidentiality. G.U.D had originally submitted its application on 14 September 2021 in which it claimed confidentiality of the entire contents of their annual financial statements for the financial year ending 30 June 2020. The Commission rejected the claim, and they filed an application for the review of the Commission’s decision to the Companies Tribunal. The Companies Tribunal upheld the review and granted the entity (G.U.D Holdings) the claim of confidentiality. It is against this background that the Commission then took the matter for review in the High Court as it was not in agreement with how the Companies Tribunal arrived at its decision of granting G.U.D the claim of confidentiality.

Substantive Legal Issues determined
This matter involved differing interpretations of various provisions of the Companies Act, which will not be dealt with in detail in this document. The main section, which informed this application, was the role and power of CIPC in terms of section 187 (4) (c) with regard to making information kept in its registers publicly available. The other part related to whether a company can withhold information to the Commission on which it is expected to pronounce on, when making an application in terms of section 212 of the Act. The entity in its application, redacted information relating to disclosure of directors remuneration. In terms of s30(4) –(6), the inclusion of this information in the annual financial statements is mandatory for entities which are required to have their annual financial statements audited in terms of the Companies Act. The entity met the criteria and ought to have included this information so that the Commission could apply its mind in making any ruling before it. The entity claimed confidentiality of the entire set of their annual financial statements which should include details on directors’ remuneration which is a mandatory disclosure applicable to the entity. The Companies Tribunal as the reviewer of the CIPC’s decision was however given the said information. The entity seemed to have pronounced on the confidentiality of this information while they were making an application to the Commission as it was redacted. This formed one of the grounds for the review application in that the decision maker should be provided with the information in order to enable him to execute his role.

The ruling also touched on the issue of privacy in terms of the Constitution and confidentiality. It emphasized that the terms are different and should be dealt with in that way. The Court also touched on the application of Protection of Personal Information Act (POPIA) and the exceptions applicable when a public body is processing personal information in fulfillment of its powers, duties and functions in terms of the law.

Key points determined on review by the High Court:
That the Companies Tribunal made an error in law by making a decision on information, which was not given to the CIPC as the main decider of the fact. The court agreed with the CIPC and of the view that GUD did not comply with peremptory provisions of section 30(4)-(6) of the Act. The court was critical of GUD electing to redact parts of its AFS on its own, for purposes of claiming confidentiality. Material facts were absent when the decision was made by the Tribunal.

The Court also held that the Companies Tribunal erred by placing reverse onus on the Commission with regard to proving that the submitted information is not confidential. The onus was always on the applicant to prove that the information which related to the application they are making is confidential.

That the Companies Tribunal made an error in law by failing to differentiate between privacy and confidentiality of the information contained in the financial statements of GUD. That the quoted legislation supports the culture of openness and transparency and that disclosure of this information would not infringe upon those laws that the applicant is relying on, viz. (Constitution, Protection of Personal Information Act (POPIA), Promotion of Access to Information Act (PAIA) and Promotion of Administrative Justice Act (PAJA) (Para [j] on page 33).

The Court also held that, overwhelming factors favouring transparency, openness, democracy in our legal and constitutional dispensation outweighed the issue of privacy and confidentiality in this matter, (Para F [14] under conclusion.

The court is not convinced that the Tribunal gave the issue of corporate transparency and governance sufficient importance given the importance and prominence it is given in S7 and Part C of the Act, PIAA, the Constitution. The court found that the Tribunal overemphasized the privacy rights at the expense of transparency.

Conclusion
The Companies Act 2008, Act 71 of 2008 as amended advocates for high levels of transparency and high standards of corporate governance. Companies during their existence interfaces with various stakeholders, especially labour, which means legal entities who exist in the threshold where they have a public interest element, there is a higher expectation for corporate disclosure. The ruling aligns with the efforts of the CIPC as a regulator to ensure transparency amongst corporates.

Ruling by the high court regarding a claim of confidentiality in terms of S212 of the companies ACT, ACT 71 OF 2008 as amended G.U.D Holdings high court review ruling, case no 26738/2022.

Court Judgment 

Enforcement of beneficial ownership filings and securities registers

by | Feb 7, 2024 | Notices

This is a follow-up enforcement notice to the one that was issued in September 2023 (Notice 53 of 2023). The Commission would like to thank the entities that heeded the call to file their beneficial ownership information in line with the General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Act 22 of 2022 as given effect by the amended Companies Regulations 2023.

The Companies and Intellectual Property Commission (CIPC) implemented a beneficial ownership register from 01 April 2023 on a voluntary basis. The filing of beneficial ownership filings and securities registers became mandatory from 24 May 2023 upon promulgation of the Amended Companies Regulations. In terms of the amended Companies regulations, entities incorporated after their promulgation thereof, have to file beneficial ownership information within 10 business days after the date of incorporation. The same timelines applies with regards to the updating of beneficial ownership records when there are changes.

Pre-existing entities, which had their anniversary date after the promulgation of the amended Companies Regulations are required to also file their beneficial ownership information. We have noted that there is still a huge number of entities, which are yet to file their securities register and or beneficial ownership information.

As of 1 April 2024, the Commission will be introducing a hard-stop functionality that will prevent entities which have not complied with beneficial ownership filing requirement from completing the process of filing their annual returns. The Commission will also be taking further and necessary enforcement actions with regards to entities which continue to be non-compliant. All entities in our register need to have filed their beneficial ownership information by 24 May 2024 as this will be anniversary date of publication of the amended Companies Regulations which made the filing of beneficial ownership information mandatory.

This notice serves as a reminder to those entities which have not complied with their mandatory securities register filing obligations and or beneficial ownership filing obligations.

Notice 5 of 2024

Deregistration of companies and close corporations in annual return deregistration process

by | Feb 1, 2024 | Notices

The Companies and Intellectual Property Commission (“CIPC”) deregistered companies and close corporations which have been in Annual Return Deregistration process for more than three (3) years and for which the notification process as per Companies Regulation 40 has been completed.

The systematic final deregistration commenced on 19 January 2024 and continued until 23 January 2024. Notification of final deregistration will commence after the systematic final deregistration has been completed and will take approximately 2 weeks to complete.

Companies and Close Corporations which have been finally deregistered may apply for re-instatement provided it meets the process and documentation requirements. Once the re-instatement has been processed, all Annual Returns together with the latest Beneficial Ownership Declaration and Annual Financial Statements/Financial Accountability Supplement must be filed within 30 business days.

Important Information:

  • The submission of the Annual Return Information together with payment should have been made before final deregistration. Mere timeous payment or deposit of fee is not regarded as filing of Annual Returns. If payment or deposit was made, but company or close corporation was finally deregistered, the company or close corporation may be re-instated provided it meets the process and document requirements.
  • IfAnnualReturnswerefiled,butnotthelatestBeneficialOwnershipDeclaration,suchmust be filed separately failure of which CIPC may initiate an investigation against the company or close corporation and issue a compliance notice.
  • Technical questions on Beneficial Ownership must be logged via the CIPC enquiry system (https://enquiries.cipc.co.za) – Department Corporate Legal Services, and the Category Beneficial Ownership.
  • Names of companies and close corporations which were finally deregistered between 19 and 23 January 2024 for Annual Return non-compliance, will be administratively protected for a period of 6 months only. After the expiration of the 6 months the name will become available for other customers to reserve.
  •   Technical questions on Annual Financial Statements / Financial Accountability Supplement must be logged via the CIPC enquiry system (https://enquiries.cipc.co.za) –

The dtic Campus (Block F – Entfutfukweni), 77 Meintjies Street, Sunnyside, Pretoria l P O Box 429, Pretoria, 0001

Call Centre: 086 100 2472 Website: www.cipc.co.za

Department Companies and Close Corporations, and the Category Financial Statements or iXBRL fault logging.

  • The list of finally deregistered companies and close corporations will be published on the CIPC website         in        due         course         under         Other         /        Gazettes          –https://www.cipc.co.za/?page_id=5045
  • If the company or close corporation did not receive Form CoR40.3 via e-mail, the contact details of directors of company or members of close corporation are outdated and should be updated once the company or close corporation has been re-instated. Failure of which, the company or close corporation will not receive Annual Return Reminders or any other communication from the CIPC.

Information Links:

 Notice 3 of 2024

Unauthorised use of CIPC name, abbreviation and logo (Previous notice 48 of 2019)

by | Jan 23, 2024 | Notices

The Companies and Intellectual Property Commission (CIPC) would like to remind customers that the words COMPANIES AND INTELLECTUAL PROPERTY COMMISSION as well as the abbreviation CIPC and the logo of CIPC have been declared a prohibited mark under the Merchandise Marks Act, Act 17 of 1941.

Therefore, the use of any of these elements may only be made with the express written authorization of CIPC. Unauthorized use constitutes a criminal offence in respect of which a fine is payable. This includes:-·

  • The use of the words COMPANIES AND INTELLECTUAL PROPERTY COMMISSION and/or the abbreviation CIPC, in e-mail addresses, on websites, documentation, marketing material or any

other material; and

  • The use of the CIPC logo on any website, documentation, marketing material or any other material.

Customers that are using these elements are requested to change their e-mail addresses, website domain names, and remove all elements from their website, documentation, or other material with immediate effect, failure of which CIPC proceed with legal proceedings to protect its intellectual property.

Notice 3 of 2024

Filing of director amendments applications

by | Jan 15, 2024 | Notices

The Companies and Intellectual Property Commission (CIPC) is committed to customer services and the effective and efficient processing of applications and associated information.

The enhanced director amendments process was launched on 04 December 2023 and detailed step by step guides are available on the website. The below information seeks to assist our customers with some of the questions that have been received from our Call Centre.

  1. How to change the Identification on my Customer Profile from a Passport to an ID?
    1. Log a ticket on https://enquiries.cipc.co.za and select the Department – Login Challenges.
    2. Write a message which includes your Customer Code, Passport Number, and the ID number. Attach a certified Copy of the ID.
    3. Our back office will update your information.
  2. How do I update a Director Address of a South African that is domiciled overseas as I’m required to select a South African Province on the Director Address.
    1. Capture the overseas Address and select any of the South African Provinces and Finalise the application.
    2. Log a ticket on https://enquiries.cipc.co.za and select Department – Companies and CCs, Category – Company Amendments, Sub Category – Director Amendments EService (CoR39)
    3. Write a message which includes the Enterprise Number, the Directors ID, and the Province/State.
    4. Our back office will update your information.
  3. I get an error of the ID Issue Date when appointing a Director.
    1. Do not type the date. Use the Calendar control to select the date.  If the date matched the Home Affairs records, the appointment will be saved.
  4. Do I need to add the + sign on an international cellphone number?
    1. No, do not add the + sign on an international cellphone number.
    2. Example for Zimbabwe (Country Code +263). The number when in Zimbabwe is 0770000000.  Capture as 263770000000

Notice 2 of 2024

CIPC emphasises the need for multi factor authentication for director amendments

by | Jan 8, 2024 | Notices

On the 4th December 2023, CIPC implemented an identity verification and multifactor authentication for director amendments. As a registrar of companies and a regulator of such, the CIPC has to exercise stringent controls and authentication processes to mitigate the risk of unauthorised director amendments and remove vulnerabilities that enable corruption and corporate crime.
The CIPC is not experiencing challenges with the system as has been purported. The implementation has been tested vigorously to ensure its successful implementation. Since the implementation of the multi factor authentication in December 2023, the CIPC processed over 8000 applications. The CIPC encourages customers to ensure their contact details are up to date before filing a Director Amendment to ensure a smooth and secure process.

Media statement 01 of 2024