What is a Securities Register
The Companies Act requires every company to make sure the company's registers are created and maintained and available to all shareholders during business hours. The company also has to file their securities register and beneficial ownership register with the Commission (CIPC) on an annual basis as per section 33(1)(Aa) of the Companies Act. The Securities Register used to be known as a share register, it contains details on the share issued as well as the shareholders. This will apply to companies and close corporations.
Understanding the Securities Register
A securities register must be filed with the relevant authorities and the relevant securities transfer tax must be declared and paid.
Special Considerations
Maintaining proper records is essential as this is required by the Companies Act and if not adhered to could result in penalties, sanctions and/or disqualifications. Registers or beneficial interest registers are now being enforced by CIPC and the Companies Act thus complying is no longer optional or open to delays.
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Frequently asked questions
What is a Securities Register?
A securities register contains all the information relating to shareholders of a company (the legal owners).
What is the difference between registered and unregistered securities?
Registered securities carry more rights whereas the opposite is true for unregistered securities. Unregistered securities are considered riskier.
What Company records must I retain?
- A record of directors as well as copies of all reports presented at AGM's
- Financial statements and accounting records
- All minutes of meetings and resolutions
- Securities register and share certificates
- Beneficial Ownership registers and records (contains beneficial ownership information)
- Company Register
What happens if I don't maintain my records in accordance with the Companies Act?
If the registers are not maintained and the company is audited by CIPC then can issue a compliance notice insisting on action to get the company records up to date.
What are the fines for non-compliance
If the company doesn't comply with the rules of the Companies Act, then they could face a fine of up to R1million and the Directors could also face a fine or imprisonment (s216) as it was their responsibility to maintain the registers. Shareholders can claim damages if these requirements have not been met as per (s20(6)).
Why should I keep my share register
The share register is not only a legal requirement but also proof of the various share allotments. These allotments must also be registered for securities transfer tax.
What are the different registers that should be maintained?
There are a couple of registers required to be maintained:
- The Securities register
- The Company's register
- The Beneficial Ownership register (must be submitted by affected companies)
Who is liable if the company registers are not maintained?
The Directors are responsible for putting a system into place and they can be held liable for a fine or even imprisonment. Directors can also be disqualified, meaning they would not be able to be a director of any company once disqualified.
Where can I find the Companies Act
Here is a link to the Companies Act for additional information - Companies Act
Must a Dormant company issue shares?
No, shares are an indication of ownership in a trading company/going concern. As soon as the company starts trading or holding assets then at this point shares would be allotted as the Directors are then required to run the company on behalf of the shareholders/owners.
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