The Company and Intellectual Property Commission (CIPC) introduced a new compliance checklist. All companies that are required to perform an independent review or an audit is required to complete the checklist on an annual basis. The intention of CIPC behind this new checklist is to improve the knowledge of directors as to their requirements as set out by the Companies Act and to verify compliance to specific aspects of the Companies Act.
What if I don’t comply?
The questionnaire is set up on a Yes/No/Not Applicable basis. CIPC request an answer to the question: Did the company comply with…? Intentionally misrepresentation is a criminal offense. If the answer is No on any question, then more detail can be given. CIPC can then either accept the explanation, issue a compliance notice and/or take steps against the directors, including declaring them as delinquent directors (this should only apply in exceptional circumstances).
What is covered in the checklist?
The relevant area and what it applies to are as follows:
|Section 4||Solvency and Liquidity test|
|Section 15||Memorandum of Incorporation and rules|
|Section 26||Access to company records|
|Section 27||Financial year|
|Section 28||Accounting records|
|Section 29||Financial Statements|
|Section 30||Annual Financial Statements|
|Section 32||Use of the company name and registration number|
|Section 33||Annual return|
|Section 44||Financial assistance for obtaining equity instruments (shares)|
|Section 45||Loans to directors|
|Section 50||Share register and certificates|
|Section 61||Shareholder meetings|
|Section 66||Board of directors|
|Section 69||Disqualified directors|
|Section 70||Director vacancies|
|Section 71||Director removal|
|Section 86||Company Secretary|
|Section 90||Auditor appointment|
|Section 92||Auditor rotation|
|Section 94||Audit committee|
|Regulation 21||Registered office and changes to it|
|Regulation 43||Social Committee (Public Interest Score >500)|
|Schedule 1||Non -Profit Companies|
Where do I obtain more detail?
Over the next couple of weeks PPHC Global will issue a series of articles explaining in more detail what the impact of the CIPC Checklist is and what is required from directors to submit a Yes/Not Applicable answer.