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Subscribe to our
bi-monthly
HPASA newsletter. |
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October 2011
RETENTION PERIODS
FOR ACCOUNTING DOCUMENTS |
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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.
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Sunel
Swart
Tenk Loubser & Associates |
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Retention
period for specific documents:
Indefinite:
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Registration certificate
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Memorandum of
Incorporation and alterations
or amendments thereto |
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Rules |
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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) |
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7 years:
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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:
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Founding statement |
| • |
Amended Founding statement
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Microfilm image of any original
record reproduced directly by camera |
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Minutes books |
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Resolutions passed at meetings |
15 years:
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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:
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ledgers |
| • |
cash books |
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journals |
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cheque books |
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bank statements |
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deposit slips |
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paid cheques |
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invoices |
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stock lists |
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other books of accounts |
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electronic representations
of information |
Records relating to taxable capital gain
or assessed capital loss and includes:
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agreement for acquisition,
disposal or lease of asset |
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details of asset transferred
into a trust |
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copies of valuations used
in determining the taxable capital |
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gain or assessed capital
loss |
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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 |
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details supporting the proportional
use of an asset for both private and business
purposes |
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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:
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Book form: after the completion
of the last entry |
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Any another form: after the
completion of the last transactions to which
it relate |
Record of all goods and services, including:
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The rate of tax applicable
to the supply and the suppliers or their
agents |
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Invoices |
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Tax invoices |
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Credit notes |
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Debit notes |
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Bank statements |
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Deposit slips |
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Stock lists |
Records of importation of goods and documents:
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bill of entry |
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documents prescribed by Custom
and Excise Act |
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receipt for payment of import
tax |
Information relating to:
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Charts and codes of accounts |
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Accounting instruction manual |
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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 |
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October 2011
THE MEMORANDUM
OF INCORPORATION – WHEN AND
HOW? |
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Jaco
Odendaal
Exceed Tax & Management
Services |
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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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