When a Client Says "Just Register It" — Your Ethics Don't Stop There

Written By Heynes Kotze

A client calls. They need a company registered, fast. They've got a contract opportunity, a tender deadline, maybe just impatience. "Can you sort it out by Friday?" And somewhere in the middle of the urgency, the question quietly surfaces: whose responsibility is this, really?

The answer, for CIBA members, is unambiguous. Yours.

Registration Is Where Governance Begins

Company registration feels routine. Log in to BizPortal or CIPC eServices, fill in the details, submit. But what happens in that process (and what you allow to be submitted) carries far more legal and professional weight than most accountants appreciate.

The moment CIPC accepts a Notice of Incorporation and enters it onto the national register, a juristic person comes into existence. That entity has its own rights, obligations, and liabilities. The directors listed on those founding documents are bound by fiduciary duties from that point forward. And the accountant (who assisted, who advised on structure, compiled the forms, and submitted the application) has professional obligations that attach to every step of the process.

The CIBA Code of Conduct makes this explicit. Every fundamental principle, integrity, objectivity, professional competence, confidentiality, and professional behaviour, applies to every engagement, every instruction, every submission. Including secretarial work. There is no carve-out for "just admin."

The Preliminary Decisions You Cannot Afford to Rush

Before a single form is submitted, accountants advising on company registration must properly address the foundational decisions that shape the entity's legal structure, governance obligations, and ongoing compliance burden.

The choice of business structure matters enormously. A sole proprietor carries unlimited personal liability for business debts. A private company (Pty Ltd) provides the shareholder with limited liability protection, but only where the corporate form is properly used and maintained. Courts can (and do) pierce the corporate veil where the company is used as an instrument of fraud, where directors engage in reckless trading, or where the separation between the company and its controllers is not genuinely maintained.

Name selection carries its own compliance obligations. Under the Companies Act No. 71 of 2008, a company name must not be identical to or confusingly similar to any existing registered company, close corporation, business name, or registered trademark. It must not falsely imply association with another entity or the State. Submitting a name without conducting a comprehensive search of the CIPC register, existing trademarks, and protected business names exposes your client to rejection, delay, and potential claims from parties with prior rights. The Act permits provisional name reservation for six months, use it.

The CIBA Code requires members to only undertake work for which they have the necessary professional competence (section 16). If you are advising on company structuring, you need to know these rules. Not just the process, but also the substance.

What "Integrity" Actually Demands Here

The Code defines integrity plainly: members must act with honesty and truthfulness and must not knowingly associate themselves with information that is false, misleading, or recklessly provided. When you submit a company registration to CIPC, you are presenting information to a regulator. The directors listed, the registered address, the memorandum of incorporation, the beneficial ownership details, all of it carries legal and regulatory consequence.

If a client asks you to list a nominee director who has no real role, to register at an address where no business is conducted, or to obscure true beneficial ownership, they are asking you to file false information with a public body. The Code is unequivocal: members must never engage in deception or arrangements lacking commercial substance. Registering a company on fabricated or misleading details is exactly that.

This is reinforced by the statutory framework itself. Directors owe fiduciary duties to the company under section 76 of the Companies Act. Directors must act in good faith, for a proper purpose, and in the best interests of the company. A director appointed in name only, without genuine authority or accountability, is not fulfilling those duties. An accountant who facilitates such an appointment knowing it to be a fiction is not merely breaching the Code, they are potentially assisting in conduct that could later be characterised as fraudulent or as part of a scheme designed to evade liability.

If a client pushes back, the Code's position is clear: you refuse, you document, and if necessary, you withdraw.

Beneficial Ownership Is Not Optional and Neither Is Your Role in It

Since April 2023, every company registered in South Africa has been required to maintain accurate beneficial ownership information with CIPC, following amendments to the Companies Act introduced under the General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Act 22 of 2022. This legislative response to South Africa's FATF grey-listing brought with it a non-negotiable obligation: who really owns and controls a company must be disclosed, accurately and on an ongoing basis.

For accountants handling secretarial work, this creates a direct professional obligation. When you assist a client with company registration, you are in the best position to ask the right questions: Who are the beneficial owners? Are there beneficial owners with 5% or more of the voting rights? Is the company affected or non-affected for purposes of the beneficial ownership rules?

The CIPC has confirmed that 1) entities are responsible for ensuring their beneficial ownership information is accurate, complete, and verified and 2) that incorrect or incomplete BO information not only contravenes the Companies Act but poses risks related to AML/CFT compliance. As CIBA's guidance on the new Optimized Beneficial Ownership Filing System makes clear, the streamlined filing process has removed the procedural excuse. There is no longer a meaningful administrative barrier to accurate disclosure.

For CIBA members, this means one thing: if the beneficial ownership information a client wants to submit is incomplete or designed to obscure true control, you do not proceed. The Code's integrity principle leaves no room for rationalisation here.

FICA: You Are an Accountable Institution

What many accountants do not appreciate is that they are themselves "accountable institutions" under the Financial Intelligence Centre Act (FICA) when providing financial, business, or professional services that involve knowledge of client transactions. This classification is not incidental, it imposes direct statutory obligations.

Before accepting a company registration mandate, accountants must conduct customer due diligence: verify the identity of all shareholders and directors, obtain evidence of their addresses, and assess the risk profile of the client relationship. This is not optional. Where the client's proposed business model, ownership structure, or instructions raise red flags (such as shell company arrangements, unclear beneficial ownership, business purposes that do not add up) you are not only ethically required to decline, as in certain circumstances, you may be required to file a Suspicious Transaction Report with the Financial Intelligence Centre within fifteen business days of the suspicion arising.

The Code's section on confidentiality (clause 2.6) and the corresponding South African legislative framework acknowledge this intersection: the duty of confidentiality is subject to statutory obligations, court orders, and professional duties to disclose. FICA creates exactly such a statutory obligation, and it overrides professional confidentiality to the extent necessary for compliance.

The Code also requires members to disclose and address conflicts between their professional obligations and client instructions. A client who pressures you to avoid customer due diligence or to register a company without proper identity verification is placing you in exactly this position. The Code's answer (and the law's answer) is the same: you do not comply.

Tax Registration: A Separate Obligation Your Client Cannot Ignore

Incorporation with CIPC does not register a company for tax purposes. This distinction trips up more newly registered companies (and their advisors) than almost any other aspect of company formation.

Under the Tax Administration Act No. 28 of 2011, companies must register separately with SARS for Income Tax, and must register for VAT once taxable supplies exceed R2.3 million in any twelve-month period, or earlier, if the company has reasonable grounds to believe it will exceed that threshold in the following twelve months. PAYE registration is mandatory within twenty-one days of the first employee commencing employment. Any changes to registered particulars (such as banking details, address, representative taxpayer) must be communicated to SARS within twenty-one business days, with failure to comply constituting an offense.

For rapidly growing companies, the VAT trajectory issue is particularly acute. A company approaching the R2.3 million threshold is required to register based on forward-looking projections, not just historical turnover. Companies that miss this trigger face back-dated VAT liability, penalties, and potentially criminal sanctions. The CIBA Code's principle of professional competence (section 1.3 and clause 2.5) requires that you know this and that you advise accordingly. Your engagement should expressly address tax registration obligations at incorporation stage, documented in writing.

Directors' Personal Liability and Your Role in It

When you advise a director on company registration and governance, you take on a share of responsibility for the outcomes of that advice. The Companies Act is unambiguous about what directors owe: section 76 requires them to act in good faith, for a proper purpose, with care, skill, and diligence. Section 22(1) prohibits the company from carrying on business recklessly, with gross negligence, or with intent to defraud. Directors who allow this to happen (including de facto directors and prescribed officers) face personal liability for all losses and costs sustained as a direct or indirect consequence.

Accountants who advise directors understand or should understand this statutory framework. Where your advice facilitates director conduct that later attracts section 77 liability (where, for example, you helped structure a company that was used to evade creditors, or failed to advise on the personal liability consequences of reckless trading) your professional exposure is real. The Code's requirements of competence and honest communication are not aspirational. They are protective, for your clients and for you.

The Code's section on NOCLAR (responding to non-compliance with laws and regulations, clauses 7.18–7.32 and 10.18–10.29) is also relevant here. If during the registration or post-registration process you become aware of conduct by the client or its directors that involves or is likely to involve serious legal non-compliance, you have obligations: to understand the relevant provisions, to raise the matter internally with appropriate authority, and in some circumstances to consider external disclosure. The Code does not require you to act as investigator or prosecutor but it does require you not to look away.

The Engagement Letter Is Not Optional

The Code requires members to provide clients with a written engagement letter before commencing any work (section 17). For company registration mandates, this letter must clearly specify the scope of services, the duties and responsibilities of both the member and the client, fees, any limitations on the services, and how the engagement can be terminated.

This requirement is not bureaucratic. The engagement letter does several things simultaneously: it allocates responsibility for the accuracy of information provided (the client's obligation), it establishes the scope within which you have agreed to act, and it creates contemporaneous evidence of the professional standards under which the engagement was conducted. In the event of a dispute (or a regulatory investigation) a clear engagement letter is often the difference between a defensible position and an indefensible one.

In practice, your engagement letter for secretarial services should address: the company registration scope and what information the client must provide, your reliance on that information and the client's responsibility for its accuracy, beneficial ownership obligations and who is responsible for ensuring correct disclosure, tax registration obligations and whether they fall within or outside the scope of the mandate, and your right to withdraw if instructions become inconsistent with your professional obligations.

"But the Client Told Me To"

One of the most important statements in the CIBA Code is this: members may not justify unethical conduct by claiming pressure, fear of losing income, or industry practice.

Clients who want things done quickly often push hard. They may imply the work will go elsewhere. They may suggest "everyone does it this way." The Code's response to this is direct: a professional always retains the ability to refuse, withdraw, or insist on doing what is right.

The practical guidance in the Code's Appendix A puts it plainly: "If the correction cannot be made, I won't be able to continue acting on this matter." That principle applies at registration just as much as it does after filing. If the information a client wants to submit is false, incomplete, or designed to deceive a regulator, the instruction is one you cannot follow and the Code gives you both the obligation and the language to say so.

The Practical Checklist

Every company registration mandate should run through these steps:

Before you start: Is there a signed engagement letter in place that covers the scope, information responsibilities, beneficial ownership, and tax registration obligations?

Client acceptance: Have you conducted appropriate due diligence on the client? Does the proposed structure and business purpose make commercial sense? Are there any FICA red flags that require further assessment or reporting?

At registration: Are all details (directors, registered address, shareholding, beneficial owners) accurate and genuinely reflective of the business? Do you have the client's written confirmation of the information provided?

On beneficial ownership: Is the company affected or non-affected? Has the BO filing obligation been addressed and documented?

On tax: Have you addressed Income Tax, VAT, and PAYE registration obligations and confirmed these are in scope or referred them expressly?

If something feels wrong: Do not proceed. Raise it with the client. Document the discussion. If they refuse to correct it, withdraw from the engagement and consider your FICA obligations.

👉 Join CIBA and we'll show you how to build a practice where compliance work is done with confidence, precision, and the professional authority your clients deserve.

Further Reading

Heynes Kotze
Next

Just Because You Can Doesn’t Mean You Should