Who Counts as a Beneficial Owner in South Africa?

South Africa now requires companies to identify and disclose the real people who ultimately control or benefit from the business, not just the names on official documents.

Who is a Beneficial Owner?

A beneficial owner is the person who truly controls a company. It's not just about who owns the shares on paper, but the individual who:

• Owns 5% or more of the company's shares (could be lower depending on the company)
• Has control over key decisions like board appointments, strategic direction, or financial decisions.
• Receives a big portion of the company's profits or benefit financially from the company's success.

Examples of Beneficial Owners

• A single person who directly owns a majority of the company's shares.
• A group of individuals acting together to control a significant portion of shares and decision-making.
• A company that is a parent company of another company.
• A trust or other legal arrangement that benefits a specific individual(s).

The "Control" Factor

The concept of control is crucial in Beneficial Ownership regulations and goes beyond just shareholding and considers the ability to influence the company's direction. It involves factors like:

• Voting power to influence decisions.
• Having the power to appoint or remove directors.
• Holding the ability to block certain decisions.
• Having a lot of control over the company even without formal positions.

What if My Company Structure is Complex?

The regulations acknowledge that company structures can be intricate. If your company involves:

Subsidiaries

You'll need to identify beneficial owners who ultimately control the parent company that owns your company.

Nominee shareholders

You'll need to determine the real beneficial owner behind the nominee who holds the shares on behalf of someone else.

The key is to identify the individual(s) who ultimately benefit from and control the company, even if the ownership structure is complex.

Need Some Help Figuring it Out?

Identifying beneficial owners can involve some investigation, especially in complex situations, and navigating this new regulation can be tricky.

If you’re unsure about anything, contact the Govchain Support Team for assistance.