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Will Beneficial Ownership Clash with the POPI Act?

Nicole on 29 May 2024
Will Beneficial Ownership Clash with the POPI Act?

South Africa's business landscape is evolving, and two key regulations are impacting how companies operate. These are the Protection of Personal Information Act (POPI) and the Beneficial Ownership requirements.

The introduction of Beneficial Ownership requirements has sparked a lot of questions among South African businesses about the potential conflict between Beneficial Ownership and the existing POPI Act. Understanding how they work together is important for your business.

What is POPI?

POPI aims to protect individuals' personal information, such as:

  • Name, ID, contact details
  • Age, race, gender, language
  • Job history, salary, bank info
  • Health records & online purchases
  • Political views & religion
  • Fingerprints, scans, usernames

Businesses that collect and store such information must comply with POPI by following rules like obtaining consent, securing data, and allowing individuals access to their information.

What is Beneficial Ownership?

Beneficial Ownership regulations require businesses to disclose all the people who own or control them. By making businesses more transparent, Beneficial Ownership helps fight financial crime and promotes fair competition.

How Do They Work Together?

While POPI emphasises data protection, Beneficial Ownership requires some personal information disclosure.

The CIPC (Companies and Intellectual Property Commission), responsible for Beneficial Ownership registration, acknowledges POPI. This means they only require the minimum information necessary for Beneficial Ownership purposes, not sensitive or private information like phone numbers or bank details.

According to POPI regulations, all Beneficial Ownership information collected must be stored securely. This includes password protection, access controls, and data breach prevention measures.

How to Manage Beneficial Ownership While Respecting Privacy

  1. Inform your beneficial owners about how their information will be used and protected.
  2. Get written consent from your beneficial owners before collecting and processing their personal information.
  3. Only collect the minimum information required by Beneficial Ownership regulations - don't ask for unnecessary personal details.
  4. Keep your Beneficial Ownership information up-to-date and accurate.

Both POPI and Beneficial Ownership serve important purposes in South Africa. POPI protects individual privacy, while Beneficial Ownership promotes transparency in business ownership.

By understanding your obligations under both regulations, you can ensure your business operates compliantly and responsibly. Online solutions like Govchain can help streamline the process and ensure you meet all requirements while respecting data privacy and avoid penalties.