S26 (1) / (2) Access to Company Records

COMPANIES ACT AMENDMENTS NO. 16 OF 2024

Access to Company Records and Annual Financial Statements by the Public and Shareholders
Amendments to Section 26(1) / (2) of the Companies Act

Shareholders:

Shareholders of companies have been afforded an additional right to request and access the register of disclosures of beneficial interest.

The right of shareholders to access the register of disclosures of beneficial interest has been added.
The section has also been amended to specify that shareholders may request access to past Annual Financial Statements of a company, aligning this right with the rights afforded to the public regarding access to Annual Financial Statements.

The information filed with CIPC regarding a company’s ultimate beneficial ownership remains restricted, meaning CIPC cannot divulge such information unless requested by an institution of authority.

Including these amendments, shareholders now have the right to request, inspect, and copy a company’s Memorandum of Incorporation, amendments thereto, Rules of the Company, registers of directors, shareholders, and Beneficial Interest Disclosures, Annual Financial Statements, reports to annual meetings, shareholder notices, and shareholder meeting minutes.

Members of the Public:

Members of the public have been granted an additional right to request, inspect, and copy the Annual Financial Statements of a company based on Public Interest Score attributes, similar to the criteria for compulsory audits.

Members of the public may request to inspect and copy a company’s Annual Financial Statements issued within the last seven years unless:
- The Annual Financial Statements were internally prepared for a company with a Public Interest Score of less than 100; or
- The Annual Financial Statements were independently prepared for a company with a Public Interest Score of less than 350.
Furthermore, members of the public may request to inspect and copy a company’s Memorandum of Incorporation (including any amendments thereto), Company Rules, the disclosure of beneficial interest, and Director and Shareholder registers.
Despite the personal information of Directors, Shareholders, and Beneficial Interest Holders contained in these registers, the right to access this information may not be impeded. Registers must contain information such as ID/Passport/Registration numbers, addresses, appointment dates, and other details per the requirements of the Companies Act and Regulations.

A person who wishes to access these records must submit a formal request to the company and may inspect and copy the requested records during reasonable business hours at the registered office/location of records of the company, following the payment of prescribed nominal amounts.

Companies must comply within 10 business days (previously 14 business days) after receiving a request for access to information or documents contemplated in Section 26. It is considered an offence for a company to fail to accommodate any reasonable access request or to unreasonably refuse access. For this reason, and given past cases involving this section, it is important for a company to obtain legal advice if they are faced with a situation where a request is made and found to be contrary to the business interest of the company to grant access.

This additional right of access to Annual Financial Statements by members of the public becomes more intriguing given the amendments to Section 30 of the Companies Act, under which companies that require an audit per the Companies Act must disclose in their Annual Financial Statements the remuneration and benefits received by each of a company’s Directors, C-Suite Executives, and Heads of Businesses (i.e., prescribed officers). Despite the move towards more transparent remuneration practices by companies, the amendments to Section 26 do not result in members of the public having a right of access to a Public or State-Owned company’s Remuneration Reports or Policies, as envisaged in the additions of Sections 30A and 30B of the Companies Act.

The Companies Act Amendments 2024:

Pertinent changes were made to our South Africa Companies Act recently after the Companies Amendment Act 2024, No. 16 and the Companies Act Second Amendment, 2024 No. 17 were ascended into law on 25 July 2024.

The amended provisions are not yet operational and will come into effect after President Cyril Ramaphosa makes proclamation in the Gazette as to the effective date.

Statucor continues to unpack the amendments and the effect that they may have on our valued clients, and we look forward to publishing further communications on our observations in future. Click here for a full summary of all changes made to the Companies Act through the 2024 Amendments or view our News page for our latest articles on the Companies Act, Governance and Compliance matters that may be pertinent to you.