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Requirement For Share Register When Lodging Director Resignations/Removals At The CIPC

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The Companies and Intellectual Properties Commission ("CIPC") appears to have begun applying Practice Note No. 70 of 2019 (“PN70”) more strictly.  PN70 was issued with a view to mitigating the risk of unauthorised and/or fraudulent changes being made on the register of directors kept by the CIPC, given that the CIPC does not keep information regarding a company’s shareholders, and has no way of verifying the validity of such resolutions passed.

According to PN70, and in terms of Regulation 168(4) of the Companies Regulations, 2011, any notice filed for the change of directors (resignation or removal) as a result of the resolution by the shareholders must be accompanied by a certified copy of the shareholders register (securities register) or share certificates [of the company], at all times.  This information is required over and above the current supporting documents necessary for director amendments, and does not currently feature in the CIPC’s checklist of documents to be uploaded.

CIPC has historically only implemented the requirement for a certified share register in respect of a change in directorship pursuant to a removal in terms of section 71 of the Companies Act 71 of 2008 and not in relation to resignations. However, in light of the stricter application of PN70, this additional requirement must be borne in mind for all director changes which are implemented as a result of a shareholders’ resolution.  PN70 does not affect applications for registration of appointments or resignations, which are accompanied by directors’ resolutions. It remains to be seen whether CIPC will implement any additional risk mitigation measures in respect of the registration of such appointments or resignations.

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