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Are you sure you don’t need to be audited?

Posted by admin on February 16, 2012 in Business intelligence |

Audit requirements
Companies with a year end after 1 May 2011, especially with year ends of 29 February 2012, need to ensure that they have changed their existing Articles of Association (deemed MOIs) to ensure that they can make use of certain provisions of the Companies Act, 2008.

Companies that have not yet amended their existing articles (deemed MOI) can find themselves bound to certain requirements in Table B of Schedule 1 of the Companies Act, 1973 – Articles for a private company having a share capital, if they adopted those articles, which would lead to additional requirements having to be met that are no longer required in terms of the Companies Act, 2008.

Three such items, inter alia, have been identified that we advise companies to consider amending if they do not wish to meet these stricter requirements.

Table B of the Articles states the following:

  • right to transfer shares are restricted
  • all companies to hold an Annual General Meeting
  • all companies must appoint an auditor

All three of these requirements have been significantly changed in the Companies Act, 2008, as per our Communiqué, dated 1 December 2011.

If you have not amended your company’s MOI, the company will still require an audit for their year end, even if they do not qualify for an audit under the Companies Act, 2008, as their MOI will still be a valid document requiring the company to have an audit.

To amend your MOI before your year-end, companies have to follow the following process:

  1. Approve a special resolution removing the requirement for audit and any additional changes. Companies could utilize the following provisions, unless their articles expressly prohibit such practices:
    a) The special resolution can be approved by electronic means (Section 60)
    b)The notice period for a shareholders’ meetings can be waived (Section 62(2A))
  2. Complete form CoR 15.2 – Notice of Amendment of Memorandum of Incorporation
  3. Attach copy of special resolution amending the MOI to Form CoR15.2
  4. Ensure date for amendment is approved before your year-end date, (e.g. 28 February 2012) and ensure the Notice is also filed prior to the year-end date. The Notice should be sent by Registered mail or ensure the CIPC stamp on date of filing (if it is filed at a later date, the later date will be the effective date).

CIPC releases
The Companies and Intellectual Properties Commission (CIPC) has released Service delivery standards, which is an indication of the maximum amount of time it will take to process 90% of the received applications. These standards deal with Companies and Close Corporations, Co-operatives, Business Rescue, Data Disclosure and Trademarks. It is important to note that these transactions can only be completed within the timeframes if customers provide all the information and the customer’s account has sufficient funds available. The standards will be reviewed every six months. Interestingly, the standards include that name reservations will be approved within 3 working days of receipt of the application, new company registration and issue of the certificate will be within 25 working days of receipt of the application and changes in company director details within 15 working days of receipt of the application.

The CIPC also released the following important notices during December 2011 and January 2012:

  • 25 January 2012 – Lodging of financial statements
  • 17 January 2012 – Guidance note 1 of 2012, Explaining the process to change your financial year end
  • 16 January 2012 – Private company online registration
  • 10 January 2012 – CIPC Clarification on company hijacking
  • 14 December 2011 – Electronic requests for changes in directorships (electronic CoR39)
  • 13 December 2011 – Close corporation registration discontinued

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