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October 2011
RETENTION PERIODS FOR ACCOUNTING DOCUMENTS
 
Due to various legislative requirements, documents should be retained for a certain period, depending on the legislation. It is important to retain documents as prescribed by the relevant legislation to avoid being guilty of an offence.

Summary of Retention Period
To assist you in ascertaining the relevant retention periods a summary of the more important acts relating to retention periods for accounting documentation can be found below.

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COMPANIES ACT, NO 71 OF 2008 AND COMPANIES REGULATIONS 2011:

The act provides that companies should keep documentation in written form, or any other form or manner that allows the information to be converted into written form within a reasonable time.
 

Sunel Swart
Tenk Loubser & Associates
Retention period for specific documents:

Indefinite:
Registration certificate
Memorandum of Incorporation and alterations or amendments thereto
Rules
Securities register and uncertificated securities register
Register of company secretary and auditors
Register of disclosures of person who hold beneficial interest equal to or in excess of 5% of the securities of that class issued in the case of Regulated companies (companies to which chapter 5, part B, C and Takeover Regulations apply)
 
7 years:
Any documents, accounts, books, writings, records or other information required to be retained
Notice and minutes of all shareholders meeting including:
- Resolutions adopted
- Document made available to holders of securities
Copies of reports presented at the annual general meeting of the company
Copies of annual financial statements required by the Act
Copies of accounting records as required by the Act
Record of directors and past directors
Written communication to holders of securities
Minutes and resolutions of directors’ meetings, audit committee and directors’ committees

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CLOSE CORPORATIONS ACT, NO 69 OF 1984


Retention period for specific documents:

Indefinite:

Founding statement
Amended Founding statement
Microfilm image of any original record reproduced directly by camera
Minutes books
Resolutions passed at meetings

15 years:
Accounting records, including supporting schedules to accounting records and ancillary accounting records
Annual financial statements, including annual accounts and the report of the accounting officer

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INCOME TAX ACT, NO 58 OF 1962; SECTION 73A & B:

The act provides that tax payers should keep documents in their original form or electronic format as prescribed by die Commissioner.

Retention period for specific documents:

5 years: (from date return received from Commissioner)
Records kept by a taxpayer who has rendered a return and includes:
ledgers
cash books
journals
cheque books
bank statements
deposit slips
paid cheques
invoices
stock lists
other books of accounts
electronic representations of information

Records relating to taxable capital gain or assessed capital loss and includes:
agreement for acquisition, disposal or lease of asset
details of asset transferred into a trust
copies of valuations used in determining the taxable capital
gain or assessed capital loss
invoices or other evidence of payment records such as bank statements and paid cheques relating to any costs claimed inrespect of the acquisition, improvement or disposal of anyasset
details supporting the proportional use of an asset for both private and business purposes
details of any continuous absence of more than 6 months from a primary residence, as contemplated in the Eighth Schedule

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VALUE ADDED TAX ACT, NO 89 OF 1991; SECTION 55
The act provides that VAT vendors should keep documents either in a book formor in any other form.

Retention period for specific documents:


5 years:
Book form: after the completion of the last entry
Any another form: after the completion of the last transactions to which it relate

Record of all goods and services, including:
The rate of tax applicable to the supply and the suppliers or their agents
Invoices
Tax invoices
Credit notes
Debit notes
Bank statements
Deposit slips
Stock lists

Records of importation of goods and documents:
bill of entry
documents prescribed by Custom and Excise Act
receipt for payment of import tax

Information relating to:
Charts and codes of accounts
Accounting instruction manual
System and program documentation which describes the accounting system used in the various accounting period.

Documentary proof substantiating the zero rating of supplies.

Sourced from Exceed


October 2011
THE MEMORANDUM OF INCORPORATION – WHEN AND HOW?
 

Jaco Odendaal
Exceed Tax & Management Services
With the Company’s Act of 2008 having come into effect on 1 May 2011, companies are faced with a number of challenges regarding compliance with the numerous new provisions of the Act. One of these challenges is certainly the Memorandum of Incorporation.

Memorandum and Articles of Association
The 1973 Act prescribed that a company should have both a Memorandum and Articles of Association. These documents were rather standard, with the schedules to the Act even providing “templates” of these documents. These standardised documents could be adopted by companies in an unchanged format or they could be altered as required (barring certain limitations, of course).

Not so Forgiving
The 2008 Act is, however, not so forgiving. There is no standard template which can now be adopted unchanged. Each company is now required to apply their minds to prepare a document, which caters specifically for the needs and particular situation of the company. In a sense, the Memorandum of Incorporation is a combination of the Memorandum of Association, the Articles of Association and the Shareholders Agreement.

It is the purpose of the Memorandum of Incorporation to determine the relationships
a. between the company and its shareholders;
b. among the shareholders of the company; and
c. between the company and the directors or officers.

Water Tight
It is therefore imperative that the company spends the sufficient amount of time and effort to draft a document that is water tight. The true worth of an agreement is often only tested when things in a relationship do not go as planned. It might therefore be wise to consult with your legal or financial professional when drafting this very important document.

Existing Companies
The 2008 Act provides for transitional arrangements for existing companies. By operation of law, the Memorandum and Articles of Association of companies existing on 30 April 2011 became the Memorandum of Incorporation for those companies.

Time Limit
These companies are allowed a two year period (until 30 April 2013) to amend this Memorandum of Incorporation to harmonise it with the Act. Two years seem like a substantial amount of time, but it is expected that the process of drafting a proper document will require a couple of months.

With 5 months already gone, time is running out...

Sourced from Exceed
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