Corporate Governance of South African Companies
Securities registers, beneficial ownership, share transactions, and CIPC compliance. Everything a South African company needs to get its governance right under the Companies Act 71 of 2008.
In This Guide
About the Author
Martin Kotze is the founder of My-Contracts.co.za, a South African contract management platform. With experience spanning corporate governance, legal tech, and contract management, Martin works with South African companies to streamline their compliance processes and ensure proper governance documentation is in place.
Disclaimer: This guide is for informational purposes only and does not constitute legal advice. The information is current as of March 2026 but legislation and CIPC requirements change. Consult a qualified attorney or corporate governance professional for advice specific to your circumstances.
The Securities Register
Every profit company incorporated in South Africa must establish and maintain a securities register under section 50 of the Companies Act. This is not optional — it is a statutory obligation enforced by CIPC.
The register is your company's definitive record of who owns what. It must be kept in one of South Africa's official languages, maintained at the company's registered office (or another notified location in SA), and comply with Regulation 32 of the Companies Regulations, 2011.
Under section 26, shareholders and qualifying persons have the right to inspect and copy the register. Companies must respond to access requests within 10 business days.
Non-Compliance Consequences
Since 1 July 2024, CIPC has implemented a hard-stop: companies cannot file their annual return without having filed their securities register and beneficial ownership declaration. This means non-compliance leads to penalty fees for late annual returns and, ultimately, deregistration of the company.
What the Securities Register Must Contain
Every entry in your securities register must comply with the following requirements.
Authorised Share Capital
The number of securities authorised per class and the date of authorisation. This must match the MOI.
Issued Securities
Total number of securities issued, reacquired, or surrendered per class. Updated with every subscription, transfer, or buyback.
Holder Details
Names and addresses of every person to whom securities are issued, the number held, and distinguishing certificate numbers for certificated shares.
Transaction Records
For every issue, transfer, or reacquisition: the date, consideration paid, and number and class of securities involved.
Beneficial Ownership
Since 1 April 2023, the register must also record prescribed beneficial ownership information for all natural persons who are ultimate beneficial owners.
Trust & Restriction Details
Details of any securities placed in trust or subject to transfer restrictions under the MOI or a shareholders agreement.
MyContracts maintains your securities register digitally — tracking holders, share classes, and every transaction automatically as you process subscriptions, transfers, and buybacks. See how it works →
Beneficial Ownership: Who Really Owns the Company?
South Africa's anti-money laundering framework now requires every company to identify and disclose its ultimate natural person beneficial owners to CIPC.
Who Is a Beneficial Owner?
A natural person who, directly or indirectly, ultimately owns 5% or more of a company's securities, or who exercises effective control over the company.
Effective control includes control through:
Board composition
Power to appoint or remove a majority of directors
Voting agreements
Formal or informal arrangements controlling voting outcomes
Contractual arrangements
Agreements giving effective control over the company's management or operations
Two Categories of Companies
Affected Companies
Public companies, state-owned enterprises, and companies meeting section 118(1)(c) criteria must maintain a separate Beneficial Interest (BI) Register.
Standard Private Companies
Must update their existing securities register with beneficial ownership information — no separate register required.
Filing Deadlines
New companies: 10 business days from incorporation. Changes: 10 business days from any change. Existing companies: with each annual return, within 30 business days of anniversary month.
Five Documents Required for CIPC Beneficial Ownership Filing
Mandate to Lodge
Board resolution authorising the filer (if not a director) to submit the filing on behalf of the company.
Register of Beneficial Owners
The BI Register (for affected companies) or annotated securities register (for standard private companies) showing all natural person beneficial owners.
Register of Shareholders
The current securities register reflecting all issued shares and their holders.
Beneficial Ownership Diagram
A disclosure chart showing the full ownership chain from the company through to each ultimate natural person beneficial owner.
Certified ID Copies
Certified copies of ID documents or notarised passport copies for each beneficial owner, dated within 3 months of filing.
Need to prepare your CIPC beneficial ownership filing? MyContracts generates the ownership diagrams, board mandates, and register extracts you need — linked directly to your company's securities register. Get started →
Resolutions: Ordinary vs Special
Understanding when each type of resolution is required is critical for valid share transactions.
Threshold
More than 50% of voting rights exercised
At least 75% of voting rights exercised
Share subscriptions
Standard share issuance within authorised capital (board resolution)
Issuance to directors/related persons, or 30%+ voting power in any class (section 41)
Share transfers
N/A — transfers are typically a board matter per MOI restrictions
N/A — but MOI amendment requiring special resolution may be needed to change transfer restrictions
Share buybacks
Pro rata buybacks from non-related parties
Buybacks from directors, prescribed officers, or related persons (section 48(8)(a))
MOI amendments
N/A
Always required (section 16) — including changes to authorised share capital or share classes
Financial assistance
N/A
Required under sections 44 and 45 to authorise the board to provide financial assistance
Written (round-robin)
Permitted under section 60, must be submitted simultaneously to all shareholders
Permitted under section 60, must be submitted simultaneously to all shareholders
MOI variation
The MOI may increase the threshold above 50%
The MOI may alter the threshold, provided at least 10% spread between ordinary and special
Written Resolutions (Section 60)
Shareholders can pass both ordinary and special resolutions in writing without holding a meeting. The resolution must be submitted simultaneously to all shareholders entitled to vote. Shareholders have 20 business days to vote. Non-simultaneous submission risks invalidity.
Board (Director) Resolutions
Board resolutions under section 66 are passed by a majority of directors present at a properly convened meeting (with quorum). Directors may also pass resolutions by written circular without a meeting, provided all directors entitled to vote sign the resolution.
Board resolutions are required for issuing shares, approving buybacks, approving transfers (if required by MOI), and providing financial assistance.
Drafting resolutions shouldn't mean starting from scratch. MyContracts provides board and shareholder resolution templates for share issuances, buybacks, financial assistance, and MOI amendments — ready to customise and circulate for signing. View resolution templates →
Certificated vs Uncertificated Securities
Most private companies use certificated shares. Listed companies on the JSE use uncertificated shares held electronically through STRATE.
Evidence of ownership
Physical share certificate signed by two directors
Electronic book entry in CSD/company register
Transfer mechanism
CM42 Securities Transfer Form + delivery of original certificate
Debit/credit entries in electronic register
Governing sections
Section 51 of the Companies Act
Sections 52-53 of the Companies Act
Typical use
Private companies (most common)
Listed companies on the JSE via STRATE
STT collection
Issuing company collects from transferee
Participant/broker collects and remits to SARS
Settlement
Manual — company registers transfer on receipt of documents
Electronic — simultaneous delivery vs payment (DvP)
CIPC Filing Obligations
Non-compliance with CIPC filing requirements can result in penalty fees, inability to file annual returns, and ultimately deregistration.
Annual Returns
Filed electronically within 30 business days of the anniversary month of incorporation. Includes basic company information, beneficial ownership declaration, and (since July 2024) a hard-stop requiring BO compliance before annual return submission.
Beneficial Ownership Changes
Any change to beneficial ownership information must be filed with CIPC within 10 business days. Companies incorporated after 24 May 2023 must submit within 10 business days of incorporation.
MOI Amendments
Filed with CIPC using Form CoR15.1A after passing a special resolution. Required for changes to authorised share capital, share classes, transfer restrictions, or any other MOI provision. Processing typically takes 1-3 months.
Securities Register Maintenance
While CIPC does not process individual share transfers for private companies, the securities register must be maintained at the registered office and be available for inspection under section 26. The register is filed with the annual return.
Frequently Asked Questions
Quick answers to the most common questions about South African corporate governance.
What must a securities register contain in South Africa?
Under section 50 of the Companies Act 71 of 2008 and Regulation 32, a securities register must contain: the number of securities authorised per class, the total issued/reacquired/surrendered per class, the names and addresses of all holders, the consideration for each issuance, the date of each issue or transfer, distinguishing certificate numbers, and (since 1 April 2023) beneficial ownership information for all natural person beneficial owners.
Who is a beneficial owner under the South African Companies Act?
A beneficial owner is a natural person who, directly or indirectly, ultimately owns 5% or more of a company's securities, or who exercises effective control over the company. Effective control includes control through board composition, voting agreements, or contractual arrangements. This definition was introduced by the General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Act 22 of 2022.
When is a special resolution required for share issuance in South Africa?
Under section 41 of the Companies Act, a special resolution (at least 75% of voting rights exercised) is required before shares may be issued to a director, prescribed officer, or person related to them, or when the voting power of the shares to be issued equals or exceeds 30% of the voting power of all shares in that class. Standard share issuances within authorised capital to non-related parties require only a board resolution.
What is the Securities Transfer Tax rate in South Africa?
Securities Transfer Tax (STT) is levied at 0.25% on the market value of every transfer of securities under the Securities Transfer Tax Act 25 of 2007. For unlisted securities, the issuing company is liable (but may recover from the transferee). Payment is due within 2 months from month-end of transfer via the SARS e-STT system. New share issuances (subscriptions) are exempt from STT — it applies only to transfers of existing securities.
What happens if you don't file beneficial ownership with CIPC?
Since 1 July 2024, CIPC has implemented a hard-stop: companies cannot file their annual return without having filed beneficial ownership for that calendar year. Non-compliance leads to penalty fees for late annual returns and, ultimately, deregistration of the company. Changes to beneficial ownership must be filed within 10 business days.
What is the solvency and liquidity test for share buybacks?
The solvency and liquidity test under section 4 of the Companies Act requires that, after a distribution (including a share buyback): (1) the company's assets, as fairly valued, equal or exceed its liabilities (solvency), and (2) the company will be able to pay its debts as they fall due in the ordinary course of business for 12 months following the distribution (liquidity). Directors who approve a buyback without reasonable grounds face personal liability.
What documents are needed to transfer shares in a South African private company?
To transfer shares in a South African private company you need: a completed CM42 Securities Transfer Form, the original share certificate (to be cancelled), evidence of compliance with MOI transfer restrictions (such as pre-emptive rights or board approval), a new share certificate issued to the transferee signed by two directors, a SARS e-STT declaration for Securities Transfer Tax at 0.25%, and an updated CIPC beneficial ownership filing within 10 business days if ownership thresholds change.
Related Guides
Continue learning with these related resources.
Ready to Get Your Corporate Governance Right?
MyContracts helps South African companies manage securities registers, share transactions, resolutions, and compliance documents — all in one platform.