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Registration as an Essential Services Provider – Guidelines for Sole Proprietors

Since the announcement of the Level 4 Lockdown restrictions and the publication of the requirement that businesses that perform essential or permitted services need to register themselves as such with the Companies and Intellectual Property Commission (CIPC), we have been inundated with questions about what is expected of sole proprietors.

The CIPC is, amongst other matters, responsible for the registration of companies (and close corporations) in South Africa. A sole proprietorship has no obligation to register with the CIPC and is, indeed, unable to do so.

When the lockdown regulations were originally published, a requirement was included that required all companies who are deemed to be performing essential or permitted services to register as such with the CIPC using an electronic portal.

This requirement raised two important aspects:

The first one that needs to be very clearly emphasised is that it is simply a registration process. There is no approval or certification. The CIPC executes no judgement in allowing the registration.

The second element is that, as the CIPC only acts as the registration authority for companies, sole proprietors cannot register themselves as essential or permitted services providers using the CIPC portal. They have therefore been left outside of the regulatory loop and are unsure about where they should register.

Section 28(4) of the Risk Adjusted Strategy Regulations as published on 29 April 2020 states:

Persons performing essential services or permitted services, must be duly designated in writing by the head of an institution, or a person designated by him or her, on a form that corresponds with Form 2 in Annexure A.

The ‘head of an institution’ is defined as

the accounting officer of a public institution; or
the CEO or an equivalent person in the case of a private institution

‘Institution’ means any public or private institution, including a sole practitioner and any other business owned and operated by a single person, that is engaged in the supply or distribution of goods or services as set out in the Table 1, or which regulates such supply or distribution, including professional regulatory bodies designated in directions made in terms of regulation 4 of the Regulations.

When interpreting the regulations, taking into account these definitions, it is clear that the head of the sole proprietor, being a business owned and operated by a single person, would be required to issue his or her own essential or permitted services permit, as per Form 2 of the Regulations.

Where the sole proprietor would be required to travel, we would recommend that he/she therefore be in possession of:

the Form 2 permit;
an Affidavit indicating that he or she is performing a service permitted in terms of the Regulations; and
any other documentary proof of the existence of, and the nature of, the business e.g. any licence to operate issued by an appropriate authority.

We have received a number of requests in cases, where the sole proprietor is an FSP, for the Compliance Officer to issue the sole proprietor with certification as an essential services provider. We are unsure as to where this expectation emanates from, but we believe it important to clearly state the following:

1. There is no requirement that a Section 17 FAIS Compliance Officer issue a certificate.
2. FAIS Compliance Officers are appointed by the FSCA in terms of the provisions of the FAIS Act and has no standing in terms of the Disaster Management Act, 2002.
3. A certificate, even if so issued by a FAIS Compliance Officer, is of no legal consequence or bearing whatsoever.

We appreciate that the published requirements may cause some confusion and that application of the rules are being inconsistently applied by law enforcement officers, but please be assured the factual regulatory position is as we have set it out as above, and the decision to register or then operate as an essential or permitted service, remains the decision of the head of the business and no one else’s.

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