Botswana Enacts Beneficial Ownership Requirements for Companies
Botswana has taken a significant step forward in promoting corporate transparency by introducing beneficial ownership requirements for companies registered under the Companies and Intellectual Property Authority (CIPA). This move is expected to increase transparency in the companies register and align Botswana with international standards.
New Legislation Assigns Responsibility to CIPA
As of immediate effect, applicants registering new companies must provide CIPA with beneficial ownership information, as mandated by Section 21 and 345 of the Companies (Amendment) Act 2018. This assigns responsibility to CIPA to establish and maintain a register of beneficial ownership for companies.
Definition of Beneficial Owner
A beneficial owner is defined as any natural person who directly or indirectly benefits from a company’s shares or securities, even if they are not listed as official owners. This definition is in line with international standards, where most corporate registries require beneficial ownership information to curb corruption, money laundering, and terrorism financing.
Requirements for Compliance
To comply with the new legislation, applicants registering companies must provide detailed information about their beneficial owners, including:
- Names
- Addresses
This requirement applies not only to new registrations but also to existing companies, which will be required to re-register using the Online Business Registration System (OBRS).
Consequences of Non-Compliance
Failure to comply with the new legislation is punishable by a fine of up to P200,000 or imprisonment for a term not exceeding five years, as stipulated in the Companies Act. This underscores the government’s commitment to ensuring that companies operating in Botswana are transparent and accountable.
Promoting Corporate Transparency and Accountability
The introduction of beneficial ownership requirements marks an important step towards promoting corporate transparency and accountability in Botswana. As the country continues to develop its regulatory framework, it is likely that more measures will be introduced to enhance transparency and prevent illicit activities.