Recording and maintaining a company’s records is paramount when it comes to ensuring corporate governance and compliance with the Companies Act No. 71 of 2008 (the “Companies Act”). Section 24 of the Companies Act sets out specific guidelines, forms and standards that a company is required to adhere to when storing company records.
Any documents, accounts, books, writing, records, or other information is required to be kept in terms of the Companies Act or any other public regulation and must be kept in written form, or in any other form or manner that allows the stored information to be converted into written form within a reasonable period of time. Such information should furthermore be stored for a period of 7 (seven) years, or for a longer period as determined by any other public regulation. However, if a company has existed for a period shorter than 7 (seven) years then the company is required to retain information for that shorter period of time (unless otherwise determined by public regulation).
This article aims to briefly unpack and explore the manner in which a company’s records should be recorded and stored in order to ensure compliance with the Companies Act.
Memorandum of Incorporation:
Every company must maintain a copy of its Memorandum of Incorporation (“MOI”), and any amendments and/or alterations that have been made to its MOI, including any rules of the company made by the company in accordance with the Companies Act. The MOI must be available at either the company’s registered address, any other company locations, or other accessible locations within the Republic of South Africa.
A company is required to keep a record of its existing director’s information during the director’s term, including its past director’s information for a period of 7 (seven) years thereafter. Individuals that are directors, or have been directors of a company, are required to provide the following information: (i) their full name and any former names, (ii) identity number or, if not applicable, the person’s date of birth, nationality and passport number if non-South African, (iii) their occupation, (iv) date of their most recent election or appointment as a director of the company, (v) name and registration details of every other company or foreign company where the person holds a directorship, and in the case of a foreign company, the nationality of that company, and (vi) any other information prescribed by regulations.
In certain cases, and to protect personal privacy, the minister by notice in the government gazette, may exempt former names to be disclosed for a person who is not a major or by persons who have been adopted, married, divorced, or widowed or in any other circumstances as prescribed.
Reports, statements, and accounting:
Records of any reports presented at an annual general meeting of the company, the annual financial statements required in terms of the Companies Act for the current financial year, and accounting records required by the Companies Act for the current financial year are all required to be kept for a period of 7 (seven) years.
Notice and minutes of all shareholders meetings:
A company is required to maintain records of all resolutions adopted by the company, all minutes of board and shareholder meetings and any document that was made available by the company to the holders of securities in relation to each such resolution or meeting for a period of 7 (seven) years after such matters were resolved upon or such meetings were held.
Copies of any written communication sent by the company to any of the holders of any class of the company’s securities must be retained for a period of 7 (seven) years after the date on which such communication was issued. This includes minutes of all meetings and resolutions of directors or shareholders, and the minutes of all committees of the company.
Every profit company must maintain a securities register, as prescribed in terms of the Companies Act. Non-profit companies with members are required to maintain a member’s register, as prescribed in terms of the Companies Act. and a company is required to appoint a company secretary if it falls under the category of a public company or state-owned company, or if such requirement is explicitly stated in the company’s MOI. The company secretary should assist the company in effectively recording and storing its records, as outlined in this article, or as mandated by other relevant legislation.
In conclusion, a company’s records must be accessible at either the company’s registered address, any other of the company’s locations or other accessible locations within the Republic of South Africa. Companies are required to file a notice setting out the location(s) at which any particular records, that are required to be kept in terms of the Companies Act, are kept – should those records not be at the company’s registered address.
It is imperative that a company maintains its records to ensure corporate transparency, compliance with the Companies Act and to promote effective corporate governance.
VDMA’s team of experts is at your disposal for any company secretarial or company law assistance that you or your business may require.
Published 7 February 2024