Legal Obligation
The Companies Act 71 of 2008 requires every company in South Africa to maintain a securities register (share register). This is a statutory, non-optional requirement.
Key sections:
- Section 24: Records, including the share register, must be kept for at least seven years and be accessible at the registered office or another approved location.
- Section 50(1)(b): The register must be maintained in accordance with prescribed standards.
- Section 26: Shareholders have the right to inspect the register at the company’s registered office.
What Is a Securities Register?
A securities register details the number and class of securities (e.g., shares) and full particulars of each beneficial owner.
Required information includes:
- Full name, date of birth, ID/passport number
- Residential and business addresses, email address
- Number, class, and certificate numbers of shares
- Issue dates, transfer records, and any restrictions or conditions attached to shares
- Percentage of ownership or control
Who Must Keep a Register?
All companies, including non-profit companies with members, must maintain an up-to-date register. Non-profit companies must keep a membership register, serving a similar function.
Retention & Accessibility
Registers must be kept for at least seven years (or the life of the company if shorter). They must be available for inspection by shareholders and regulators. Electronic registers are permitted if access and security requirements are met.
Why It Matters
The register is the definitive proof of ownership in South Africa; share certificates are secondary. Accurate registers protect the company, build stakeholder trust, and ensure regulatory compliance.
Penalties & Consequences
- Administrative fines: Up to R1 million for non-compliance (Section 216).
- Compliance notices: Issued by CIPC, with escalating sanctions for non-compliance.
- Director liability: Directors are personally responsible; non-compliance can lead to fines, imprisonment, and civil claims (Section 20(6)).
- Criminal offences: Falsifying records or providing misleading information is prosecutable (Section 214).
- Audit impact: Non-compliance is flagged as a reportable irregularity.
- Reputational damage and possible deregistration for persistent non-compliance.
Compliance Checklist
- Establish and Maintain: Create a register for each class of shares, in the prescribed format, stored at the registered office or approved location.
- Include Mandatory Details: Capture all required shareholder and share information.
- Update Regularly: Promptly record transfers and changes in ownership or contact details.
- Retention & Accessibility: Keep records for seven years; ensure inspection rights.
- Annual Compliance Checks: Confirm completeness and accuracy; include in CIPC Annual Return.
- Governance: Assign responsibility to the Company Secretary or Compliance Officer; directors must understand their liability.
- Digital Compliance: Ensure secure storage, easy retrieval, and backup for electronic records.
You must record the number and class of securities, and for each beneficial owner, provide their name, date of birth, ID or passport number, addresses, email address, and percentage of ownership or control.
Yes. If you are a non-profit company with members, you are legally required to keep a membership register, which serves a similar function to a securities register.
Non-compliance can result in penalties, reputational damage, and difficulties with regulatory authorities. It may also erode trust among stakeholders and investors.
The register should be updated whenever there is a change in ownership or control, and reviewed regularly to ensure ongoing accuracy.
For expert guidance on company secretarial best practices and CIPC compliance, reach out to Rand Corporate Consultant (Pty) Ltd at info@randco.co.za.
