New laws close loopholes for corporate vice
Mbongeni Mguni | Friday April 13, 2018 13:24
The amendments to the Companies Act will also kill off the provision for dormant companies and instead only provide two possible statuses for companies – active and deregistered.
New Investment, Trade and Industry minister, Bogolo Kenewendo this week retabled the Companies Act amendments, as well as the Registration of Business Names Re-Registration Bill and Registration of Business Names Bill in Parliament. Legislators passed the Registration of Business Names Re-Registration Bill on Tuesday. The youthful minister said the legislation was part of the broader Doing Business reforms roadmap.
Together two other bills already before the Parliament, the changes in effect mean all companies in Botswana will be given a period within which to re-register their names and shareholdings on an online database, that will be made freely accessible to the public.
For the first time, companies will be required to disclose beneficial owners, or interested parties who under current laws are not required to be declared.
According to Armstrong Attorney’s pupil attorney, Kagi Mogae, the introduction of amendments around beneficial owners is designed to squeeze loopholes in the law for money laundering and other practices. A “beneficial owner” is defined as a person who directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise is the ultimate beneficiary of a share or other securities in a company, he said.
“The Amendment Bill requires that companies disclose who its beneficial owners are to ensure that the company is not being used as a vehicle for money laundering, terrorist financing or other illegal activities.
“In addition, the Bill requires external companies to lodge notice in the prescribed form with the Registrar, of any change or alteration in the shareholding, shares or beneficial ownership thereof.” Mogae said another notable introduction was the removal of all reference to dormant companies.
“Going forward companies will thus either have an active or de-registered status. “One of the popular advantages of having a dormant company status is that the obligation to submit annual returns is suspended, until the company resumes operating. The coming into force of the Amendment Bill will result in the loss of this advantage and the dormant status of companies,” he said.
Once fully passed, the laws will require all companies in Botswana to re-register onto the online database for companies, a move that will be achieved by removing all reference in the law to the manual inspection of company files.
The companies register will be available online and accessible to the public at no cost.
“With the availability of online-services, companies will be able to submit their annual returns online as opposed to queuing for hours,” Mogae added. “The “Amendment Bill seeks, amongst others, to introduce the provision of online services by the Companies and Intellectual Property Authority to the public, in a bid to be more efficient and increase the ease of doing business in Botswana.”