Approximately 141 000 businesses face deregistration

The Business and Intellectual Property Authority (Bipa) has announced that it has begun deregistering businesses that are not in compliance with the statutory beneficial ownership disclosure requirements.

Bipa in a statement indicated that approximately 141 000 organisations face the risk of deregistration due to their failure to comply with the beneficial ownership obligation.

The statement announced a phased deregistration process for businesses that remain non-compliant with the statutory beneficial ownership disclosure requirements.

The obligation of the Beneficial Ownership Declaration was established through amendments to the Companies Act of 2004 and the Close Corporation Act of 1998, and took effect in July 2023.

Prior to the announcement, Bipa carried out large-scale public awareness campaigns that employed various media channels and nationwide outreach programmes to inform business owners of their new compliance obligations.

The statement highlighted that an order was issued in April this year by Bipa, notifying all defiant business owners of the potential for deregistration.

“In a directive issued on 11 April, Bipa notified all non-compliant entities of the risk of deregistration, effective from 16 May, if they fail to comply by this deadline,” the statement notes.

“Deregistration carries substantial legal and financial ramifications for both the entity and its associated interests,” the statement warns.

The statement went on to list the damaging effects of deregistration.

“Deregistration can lead to adverse consequences, including the potential loss of existing contracts, especially those related to public procurement, possible restrictions or closure of business bank accounts, deterrence to potential investment, and increased vulnerability to legal challenges, particularly for entities involved in ongoing litigation,” the statement stresses.

“Given the severe and far-reaching implications of deregistration, Bipa reiterates its urgent appeal to all non-compliant businesses to immediately submit their beneficial ownership information and ensure compliance,” the statement details.