Do you have a beneficial interest in shares which are registered in the name of someone else? Or, are you the registered holder of shares in which someone else holds a beneficial interest? If so, you should be aware of the proposed changes to the law on beneficial interests in securities as contained in the Companies Amendment Bill, 2021. The proposals are in keeping with a move towards transparency and identifying the natural persons who ultimately benefit from, or control, entities in order to prevent money-laundering and corruption.
This issue is governed by Section 56 of the Companies Act, 2008 and its provisions focus on public companies and/or regulated companies. The Bill proposes amendments to Section 56, which new provisions would apply to every company.
Some proposals in the Bill are:
- If the registered holder of a share does not hold all the beneficial interest in that share, that registered holder must notify the company, in writing, of the identity of the beneficial holders and detail the extent of their beneficial interests. This information must be given on registration and within 5 business days after the end of every month during which a change occurred, or more promptly or frequently as may be required by a central depository agency. It must also be provided on demand by the company on payment of a prescribed fee to the registered holder.
- A company must, each quarter, require the registered holder of any of its securities of which any beneficial interest holder is in doubt and any person which it has any cause to believe is a beneficial interest holder, to confirm whether the registered holder is the holder of the beneficial interest in the securities and, if not, to provide details of all the beneficial interest holders in the securities and the extent of their holding during a preceding period. This information must be provided within 10 business days.
- Every company must establish and maintain a register of the disclosures made in terms of Section 56.
- If a company is required to have its annual financial statements audited in terms of Section 30(2) of the Act, the company must publish in its annual financial statement a list of persons who, in aggregate, alone or together with another person, hold beneficial interests amounting 5% or more of the total number of securities of that class or any such percentage as may be prescribed by the Minister.
Janine Will
