The Companies and Intellectual Property Commission (CIPC) Compliance Checklist, which became effective from 1 January 2020, now requires all companies except close corporations to answer a 24 question compliance list.
The purpose of the checklist is:
- to ensure companies are compliant with the Companies Act
- to serve as an educational tool for directors and company secretaries, in guiding them with regards to their responsibilities in terms of the Companies Act;
- to monitor and regulate proper compliance with the Act, and allow action to be taken accordingly.
SA Institute of Chartered Accountants’ (Saica) Juanita Steenekamp points out the checklist comprises 24 “yes”, “no” or “not applicable” questions though no provision is made for companies to explain their answers.
The CIPC responds that companies can supplement their answers by emailing to COR135.email@example.com.
The board of directors are responsible for compliance with the Companies Act, and directors are expected to be aware of their responsibilities. Anyone knowingly providing false information to the CIPC is guilty of an offense under Section 215(2)(e) of the Act with a penalty of 12 months, or both a fine or imprisonment in terms of Section 216(b) of the Act.
Steenekamp says there are concerns over how the information provided will be dealt with and what happens when there are differences of interpretation over clauses in the Act.
Read more on Accounting Weekly.