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CIPC: Reminder to Companies and Close Corporations to file Annual Returns
- 25 July 2023
- Accounting
- South African Accounting Academy
All companies (including external companies) (e.g. non-profit, private and public companies) and close corporations are required by law (Companies Act 71. of 2008) to lodge their Annual Returns with CIPC within a certain period of time every year.
Companies have 30 business days from the date after its anniversary date and close corporations from the beginning of its anniversary month to the end of the month thereafter to file. Therefore, these companies and close corporations are already in non-compliance with their legal obligation to file Annual Returns.
The CIPC has seen a dramatic growth in the volume of companies and close corporation not filing Annual Returns and hereby reminds entities of their duty to file Annual Returns and the legal consequence for non-compliance. Failure to submit Annual Returns will result in the Commission assuming that, the company and/ or close corporation is not doing business or is not intending on doing business in the foreseeable future, and will therefore result in the company/close corporation being deregistered.
Companies and Close Corporations that are non-compliant with Annual Returns will experience a penalty fee to their standard filing fee and if non-compliance continues will be deregistered. Once deregistered, the company or close corporation ceases to exist (its legal personality is withdrawn) and the directors or members may be held personally liable for the debit of the company or close corporation.
Enterprises are advised to comply with immediate effect if their businesses are still in business. If business is dormant or has not been conducting business and there is no intention to conduct business in the near future, kindly do not file Annual Returns. The company or close corporation will automatically be deregister.
Page 2 of the Notice contains handy notes for the customer.
Click here to download the Media Release:
Relevance to Auditors, Independent Reviewers & Accountants:
- The Companies Act is yet another piece of legislation that your clients must comply with, and which you must assess compliance with. If they don’t comply with the relevant laws and regulations, you have certain reporting obligations in terms of NOCLAR (NOn-Compliance with Laws And Regulations) – this could include reporting to management, qualifying your audit opinion, reporting a Reportable Irregularity, etc.
- As an auditor, independent reviewer and accountant, you also need to monitor your client’s compliance with the Companies Act and all relevant notices/enforcements/practice notes/customer letters issued by CIPC as the regulator.
- Where you perform these compliance tasks on behalf of your client, you need to ensure that you comply with all relevant notices/enforcements/practice notes/customer letters issued by CIPC as the regulator.
- Company Secretarial staff play a critical role in bridging the gap between entities and CIPC. As legislation, regulations and tax law are continuously changing and evolving, it is of utmost importance for companies and company secretarial practitioners to keep abreast of such changes in so that companies continue to meet their compliance obligations.
Relevance to Your clients:
- An entity (company or close corporation) has a duty to comply with the Companies Act, and all relevant notices/enforcements/practice notes/customer letters issued by CIPC as the regulator.
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