Statutory Compliance in terms of the Companies Act, 71 of 2008 (the ‘Act’) has always played a significant role in the maintenance of businesses in South Africa, but often it comes second to the day-to-day operations and management of those same businesses.
During the slowdown period caused by the COVID-19 pandemic and the related restrictions on business, it is advisable that we take the opportunity to evaluate the compliance of our businesses, remaining mindful of some of the consequences of non-compliance, such as penalties, litigation, material effect on finances, loss of reputation, or in extreme cases, imprisonment.
Statutory Compliance is governed by a set of non-negotiable rules, regulations, and laws. In a business sense, “Compliance” refers to a company meeting its legal obligations. These compliance standards are important, as they serve to protect the company and its stakeholders.
The Act requires all companies to maintain their company records. The Memorandum of Incorporation (MOI) and any amendments or alterations thereto, as well as any rules that may apply to the company in terms of its MOI, should be kept on record at all times.
In addition, Section 24 of the Act, requires companies to keep the following records:
- Register of Directors
- Register of Shares
- Register of Company Secretary and Auditor (if required by the MOI)
- Reports presented at an Annual General Meeting
- Notices and Minutes of all Director and Shareholder Meetings
- Resolutions passed
- Documents relating to passed Resolutions
- Written communication to Shareholders
- Minutes of Committees formed
- Copies of Annual Financial Statements
- Copies of Accounting Records
Companies are obliged to notify the Companies and Intellectual Property Commission (CIPC) of certain information as per the following:
- Filing of Annual Returns
- Any additions or changes made to the MOI
- Changes in the Registered Address
- Changes in the Location of the Company Records
- Changes in the Financial Year End
- Appointments, Resignations and Removals of Directors
- Commencement of Business Rescue
- Resolution to Wind Up a Company
Upon review of your company records, should you come across anything that needs to be updated, we are available and happy to assist.
Please feel free to contact any one of our consultants to discuss your statutory compliance requirements.