CIPC gives companies a new-year headache

Shortly before the start of the December holidays, the Companies and Intellectual Property Commission (CIPC) implemented a new “identity verification and multi-factor authentication” process for director amendments.

However, numerous complaints about delays and practical issues with the process emerged from the get-go, particularly from secretarial practitioners who deal with the administration of large, listed companies.

The CIPC issued a notice on 4 December alerting customers to the change.

CIPC commissioner Rory Voller explained in the December notice that due to the increase in director amendments, and with criminal activities being prevalent, the historical “single-factor” authentication process has been challenged as a “reliable authentication control”. It is now deemed insufficient.

“The purpose of this multi-factor authentication therefore, is to provide a high level of assurance that the entity representative logging on to the CIPC system is who they say they are and have the mandate to perform the respective amendments pertaining to the entity.”

Only directors themselves will now be allowed to make amendments since they will receive one-time pin numbers (OTPs) individually.

Noticeable slowdown

A secretarial practitioner said with the change in December there has been a noticeable slowdown in lodging amendments successfully.

This is caused by several factors, including incorrect e-mail and cellphone contact details on the CIPC database, directors not receiving the OTPs or not responding within the specified time frame, and the role of the department of home affairs.

The issue date of the filer of the amendment, and the directors’ IDs, must be verified against the data from the Department of Home Affairs.

However, the department’s systems are offline “most of the time” making it impossible to finalise the amendment, an agent told Moneyweb.

Private sector role players have lamented the lack of engagement when government entities change systems or processes that directly impact their businesses.

“There is just no consultation when systems are designed,” a frustrated service provider said. Practitioners want to petition the CIPC to obtain advice from experts who can either revamp or rewrite the system.