Companies Amendment Bill: Amendments to the annual return
This article serves as the fourth of five instalments dedicated to addressing the five most significant amendments proposed by the Companies Amendment Bill, 2018 (the “Bill”) and the writer’s comments thereon.
A significant change which is not receiving enough attention in my view is the proposed amendment to section 33 of the Companies Act, 2008 (the “Companies Act”). The amendment to section 33 proposes that every company must file an annual return at the anniversary of its incorporation and in that return, include a copy of its latest annual financial statements, as well as a copy of the company’s securities register as required in terms of section 50.
Under the current Companies Act, a company is required to file its annual return, together with only a copy of its annual financial statement, if it is required to have its annual financial statements audited in terms of section 30(2) or the regulations contemplated in section 30(7). The Bill now requires all companies to submit its annual financial statements, irrespective of whether the company’s annual financial statements are required to be audited. In addition to this, every company must also file a copy of its securities register. This is not required under the current Companies Act.
The contents of the securities register, prescribed by sections 50(1) and (2) of the Companies Act, requires, in respect of certificated securities, detail of the names and addresses of the persons holding securities, the number of securities held by such a person, as well as the names and addresses of the registered holder or the holder of a beneficial interest in the security.
The proposed amendment of section 33 presents significant consequences on all companies as a company will now be required to file copies of its annual financial statements and securities register, which in turn renders it public documents which will be up for public scrutiny.