COMPANY REGISTERS — NON-COMPLIANCE COULD COST YOU R1 MILLION (OR WORSE)

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Companies failing to maintain proper share registers could face fines of up to R1 million — and directors may even face jail time.

Under the Companies Act, every director is legally responsible for ensuring that the company’s registers are:

  • Created and maintained correctly
  • Available to shareholders during business hours
    (Sections 24, 25 & 26(3))

The securities register must be updated as soon as practicable after receiving consideration for shares (Section 40(4)(b)). This is not something that can be delayed until “needed” — it’s a statutory obligation.

Why It Matters

The share register is the legal evidence of shareholding.
If your name isn’t recorded in the register, you’re not legally recognised as a shareholder — even if you paid for the shares.

This has serious implications if disputes arise or if the company faces legal or financial scrutiny.

What Happens If You Don’t Comply?

Failure to maintain registers will be flagged as a reportable irregularity during:

  • An audit (APA Act Section 45(1)(a))
  • A review (Companies Regulations, Regulation 29)

CIPC will issue a compliance notice, requiring the company to correct the issue.

If the company fails to comply:

  • It may face an administrative fine of up to R1 million (Section 216)
  • Directors may face personal fines and/or imprisonment
  • Shareholders may sue directors for damages caused by non-compliance (Section 20(6))

What You Should Do

If you’ve already prepared a register in accordance with the Act — this is your reminder to keep it updated.

If not, now is the time to act.

The risks of delay or neglect are simply too high.