Commencing with immediate effect, those who register companies are required to provide the Companies and Intellectual Property Authority (CIPA), with beneficial ownership information pursuant to Section 21 and 345 of the Companies (Amendment) Act 2018, and in line with the Financial Intelligence Agency (FIA) Act. The new legislation has assigned responsibility to CIPA to establish and maintain a register of beneficial ownership for companies.

A beneficial owner of a company is defined in terms of the Companies (Amendment) Act 2018 as “any natural person who directly or indirectly through any contact, arrangement, understanding, relationship or otherwise, is the ultimate beneficiary of a share or other securities in a company.” In layman’s terms, a beneficial owner of a company enjoys the benefits or proceeds of a company or controls a company without being on record as the official owner.

It should be noted that implementation of a register of beneficial ownership is not peculiar to Botswana, as it is now a requirement for most corporate registries around the world. A beneficial ownership registry is a key tool for increasing transparency of the companies register, curbing corruption and reducing instances of money laundering and terrorism financing through identifying the real owners of registered companies.

Who is affected?

CIPA has introduced new registration forms that will enable all those who register companies to provide beneficial ownership information.

What new information is required?

In addition to providing the details of directors and shareholders, applicants are required to provide the names, addresses and details of all beneficial owners of the company. The nature of interest of the beneficial owner in the Company must also be declared. 

What are the penalties for non-compliance?

The Companies Act stipulates that non-compliance to the new legislation is an offence and may attract a jail term not exceeding 5 years or a fine not exceeding P200,000.00.