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PIS Score

/PIS Score

Do you know what your Company's Public Interest Score is?

The Companies Act, 2008 (Act 71 of 2008 – Company Regulation 26(2)), has made mandatory the submission of a Company Public Interest Score (PIS) for all private and personal liability companies and close corporations in South Africa.

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What is the PIS Score?

PIS must be calculated and submitted at the end of each financial year, along with the company’s financial statements (if required), to the CIPC (Companies and Intellectual Properties Commission). The PIS is an indication of your company’s level of public interest; in other words – the level to which it must be regulated, and the financial reporting standards required for transparency, in the public interest.

Your company’s PIS will determine whether your company requires independent review, or audit, or neither, of financial statements, by whom, and what financial reporting standards are applicable. It can also determine the need for a social and ethics committee for private (non-State owned and unlisted) companies with high PIS.

HOW TO DETERMINE YOUR PIS SCORE

PIS is determined on a points system. Points are given for a simple set of structural and financial parameters:

  • Number of employees (or average over a financial year, if this number varies from year to year) – 1 point per employee
  • Third party liabilities – 1 point per R1 million (or portion of)
  • Turnover – 1 point per R1 million (or portion of)
  • Number of shareholders – 1 point per shareholder (irrespective of how many shares they hold individually).

CALCULATING YOUR PIS SCORE

The above points are added together to calculate your company PIS score. The higher the PIS score, the higher the requirement for public accountability, i.e. regulation and oversight through financial statements review and audit, and, where applicable, social/ethics review.

EXEPTIONS

Owner managed companies, that is a company where the Directors and Shareholders are the same people, with a PIS of less than 100, are not required to have their Financial Statements audited or reviewed, and may simply submit a Compilation.

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