For many business owners, beneficial ownership remains a compliance box to tick when filing an annual return. But increasingly, getting it wrong, or simply failing to keep it current, can have consequences far beyond paperwork, says Janus Joubert of JBS Advisory & Accounting.
Since 1 July 2024, the Companies and Intellectual Property Commission (CIPC) has operated a hard stop preventing companies from filing annual returns unless their beneficial ownership information is submitted and up to date. CIPC says non-compliance can lead to enforcement action and deregistration.
The scale of enforcement is significant. In its 2024/25 annual report, CIPC said it deregistered more than 800,000 companies and close corporations that failed to comply with annual return and beneficial ownership requirements.
For businesses, the lesson is that beneficial ownership can no longer be treated as an administrative afterthought.
“What starts as an overlooked declaration can end as a genuine threat to trading continuity, and that’s exactly why we treat beneficial ownership as a standing item, not an annual afterthought, when we manage company secretarial work for our clients,” explains Joubert.
The risk is particularly acute where ownership structures are complex. Changes in shareholders, voting arrangements, trusts or family agreements can mean that information that was accurate when previously submitted may no longer reflect who ultimately exercises control.
There is also an important distinction between CIPC and SARS that businesses should understand. Beneficial ownership information submitted to CIPC and disclosures made in the SARS ITR14 are not necessarily determined in the same way.
“CIPC’s beneficial ownership register and SARS’s ITR14 disclosure are not simply two versions of the same exercise,” Joubert says. “Simply exporting your CIPC beneficial ownership register and pasting it into the ITR14 skips the analysis entirely.”
That distinction matters because a person who does not appear on a company’s CIPC beneficial ownership declaration may still need to be considered when determining actual control for tax purposes, depending on the underlying ownership arrangements.
South Africa’s exit from the Financial Action Task Force grey list in October 2025 has also not reduced the importance of this scrutiny. National Treasury has stressed that continued monitoring, enforcement and sustainable improvements remain necessary, while SARS has described the exit as a milestone rather than a finish line.
“For businesses, the practical response is straightforward: review beneficial ownership information before annual returns are due, separately consider the SARS disclosure, and retain documentation supporting the conclusions reached. The safest approach is to review both filings before submission and make sure the information accurately reflects the underlying ownership and control structure,” concludes Joubert.
