The Countdown Begins: Deregistration of Companies and Close Corporations Starting November 2023
The Companies and Intellectual Property Commission (CIPC) serves as South Africa’s governing authority tasked with the registration and oversight of companies. Within its operations, CIPC follows an annual return deregistration procedure, whereby companies that neglect their annual return filing responsibilities face deregistration. CIPC has provided mid-November 2023 as the final deregistration date for companies that fail to comply with filing obligations.
Notice 19 of 2023 to customers: CIPC has deregistered 647853 companies and close corporations on 30th March 2023.
How can you avoid company deregistration? By filing your annual financial statements (AFS) before the deadline! Read on to learn everything you must know about company deregistration by CIPC.
Exploring the Instances in which Companies and Close Corporations Face Deregistration
According to Companies Regulation 40, 2011, companies and close corporations may get deregistered in the following instances:
- They failed to lodge annual returns for two successive years.
- They requested deregistration. The request indicates that the company or close corporation has winded up the business and has no assets or inadequacy of assets for liquidation.
- The commission believes the company or close corporation has been inactive for seven years.
How to Deregister a Company or Close Corporation in 3 Easy Steps:
If your company or close corporation has ceased business or has inadequate or no assets, you can manually refer it for deregistration. To proceed with the deregistration of your company, kindly follow the below steps:
Step 1: Prepare a formal letter containing the following details:
- Confirmation that the company has ceased all trading activities or is dormant.
- Statement affirming that the company possesses no assets and cannot be liquidated.
- Inclusion of the company tax number.
- The letter must bear the signatures of a minimum of 50% of the board members.
Step 2: Gather the necessary supporting documentation as follows:
- A tax clearance certificate or SARS-certified document indicating the absence of any outstanding tax obligations
- In cases where a third party is initiating the deregistration process, evidence must be provided to establish the company’s dormant status or cessation of trading. This must be accompanied by a confirmation that no assets are held, thus preventing liquidation.
Step 3: Forward the prepared letter and supporting documents to firstname.lastname@example.org.
Upon receipt, the finalisation of your deregistration request will be processed within three months.
For More Information – Application for Deregistration of Companies and Close Corporations
Compliance Checklist to Be Filed Before Deregistration
The compliance checklist serves as an educational resource for directors and company secretaries. It includes the essential obligations that companies must follow to maintain compliance. Companies are required to file this checklist before deregistration. The CIPC compliance checklist contains 24 questions with “yes”, “no”, or “not applicable” options regarding the following sections:
Advantages of Updating Beneficiary Contact Details
Every year, the CIPC sends notifications via e-mails to companies and close corporations referred for deregistration due to non-compliance with annual returns. To receive these e-mail reminders from CIPC, companies need to update their beneficiary contact details. Keeping your contact details up-to-date lets you receive important updates and information on time.
After receiving these e-mails, companies and close corporations must confirm the status of their enterprise and whether they will be conducting business in the near future. If yes, they must file the outstanding annual returns and the required AFS or FAS, including the compliance checklist, before the final deregistration.
CIPC requires all co-operatives, public, private, and state-owned companies to file their AFS in iXBRL format. Failure to do so can result in penalties or even company deregistration.
Solution? Partner with a trusted vendor like DataTracks to prepare error-free iXBRL reports on time, every time.
DataTracks is CIPC’s approved software and service provider for iXBRL reporting. With 18+ years of experience, the professionals at the company have successfully prepared over 328,000 compliance reports for more than 23,400 clients. For companies with an in-house iXBRL team, DataTracks provides a cloud-based iXBRL tagging software, enabling you to generate 100% error-free reports. DataTracks’ expertise in XBRL and iXBRL services makes it your best bet for compliance reporting. So contact an expert @ +27-10-446-9061 or e-mail email@example.com and prevent your company from getting deregistered.