One aspect that is often not considered in great detail during the formation and registration of a juristic person in South Africa is its registered office, also often referred to as its registered address. Parties often opt to use a convenient location as a company’s registered address and do not give it sufficient consideration when registering a company or when moving a company from one location to another. This article will briefly consider the legal requirements relating to a company’s registered office.
The Companies and Intellectual Property Commission (CIPC) has done a great deal to streamline the processes which it is responsible for. One such process is the registration of companies, which can nowadays be conveniently done on their website. This is especially true for private companies where a standard template memorandum of incorporation is provided with very little input required from the person registering the company. We believe that the ease of registration contributes to the lack of proper consideration afforded to certain aspects of a company to be incorporated, including which location to use as the company’s registered office.
Section 23(3)(b) of the Companies Act 71 of 2008 (the Act) states that every company must “register the address of its office, or its principal office if it has more than one office”. This specific section does not set out the requirements for such a registered office and so one must look elsewhere in the Act for such requirements. However, this section does use the word “office” which indicates that the registered office must at least be a physical space which is capable of being occupied and that it cannot merely be a PO Box or empty piece of land somewhere.
Section 24(3) of the Act requires of a company to keep and maintain certain documentation, including its memorandum of incorporation, minutes of shareholders meetings, and certain documentation relating to its directors. Importantly, section 25(1) of the Act states that “the records referred to in section 24 must be accessible at or from the company’s registered office or another location, or other locations, within the Republic”. This section supports the above contention that the registered office must be a physical space capable of storing documentation and frequented people as the documents must also be accessible unless the documents are stored elsewhere subject to a written notice stating where such other location is.
Section 28(2) of the Act is also important. This section states that the “company’s accounting records must be kept at, or be accessible from, the registered office of the company”. Interestingly, this section does not make provision for the accounting records to be stored elsewhere as is the case for the other documents referred to in section 24(3) of the Act.
Judge Binns-Ward stated in Sibakhulu Construction (Pty) Ltd vs Wedgewood Village Golf and Country Estate (Pty) Ltd when comparing the concept of registered office in terms of the Act with how it was used in the 1973 Companies Act that: “a material distinction between a ‘registered office’ under the 2008 Act and its predecessors, however, is that under the current Act the registered office must be the company’s only office, alternatively, if it has more than one office, its ‘principal office’. The term ‘principal office’ is not specially defined in the statute. It seems from the context – more particularly, the requirements of what must be kept or accessible there – that it is intended to denote the place where the administrative business of the company is principally conducted, in the sense of being the place where the company’s general administration is centred.”
It is clear from the above that one must carefully consider the address of a company’s registered office when registering a company, and that the company must ensure that its registered office is kept up to date with the CIPC as it must maintain the registered office in terms of section 23(3)(a) of the Act. Using a convenient address such as, for example, the incorporator’s residential address or the company’s auditor’s address (as has in the past been common practice) is not permitted under the Act.
WRITTEN BY PHILIP SWANEPOEL
Philip Swanepoel is an Attorney at Miller Bosman Le Roux Attorneys.
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