Frequently Asked Questions

Should the company or close corporation be deregistered due to non-payment of annual returns it is possible to reinstate the company at CIPC. When a company is deregistered, any assets it may have are forfeited to the State.

Part of the reinstatement process involves corresponding with the relevant Government Departments and obtaining the necessary authorities. Once the process is complete CIPC will open the facility to lodge the annual return. This extension of time is only valid for 30 days.

As of 1 January 2020, the CIPC (Companies and Intellectual Property Commission) includes a compliance checklist. This forms a mandatory part of its annual return process. The CIPC checklist is intended to increase compliance, and is primarily motivated by South Africa’s need to attract investment. A high level of compliance will impact positively on our sovereign rating, and countries with a good compliance rating attract better interest rates from the IMF (International Monetary Fund). At present, however, CIPC has found that many companies are still not compliant with basic provisions of the Companies Act, despite it having been in existence for more than a decade, and many directors remain unaware of their obligations. The compliance checklist is thus intended to increase their awareness of their duties under the law. CIPC therefore intends for the compliance questionnaire to become a living document. Rather than relying on their auditors to complete the checklist, company directors should work through the questions and know how to answer the checklist.

Completing the checklist is mandatory: a company cannot complete their Annual Return without completing the checklist, and failure to complete an annual return could, in turn, result in a company being deregistered. Knowingly providing false information in the checklist carries a fine or prison length not exceeding 12 months, or both.

Completing the checklist

The checklist comprises 24 questions, with three possible answers: yes, no or not applicable. Each of the questions asks whether the company has complied with a specific section of the Companies Act in the previous year. The checklist also provides a PDF of the relevant section, regulation and schedule.

Without a working knowledge of the Companies Act, it may be difficult to answer the questions. Each section needs to be considered and explored, yet many companies are unlikely to do so if they assume that certain sections do not form part of their core business.
Professional guidance in completing the questionnaire is therefore advisable.

Alternatively, there are courses available that offer to educate participants in how to complete the questionnaire, thereby empowering the client to do so in future.

Ultimately, completing the checklist should be used as an opportunity to gain a greater understanding of your company’s responsibilities, ensuring greater compliance going forward.

At Rand Corporate Consultants, our approach includes a company review and full de-brief meeting with the directors, followed by a written report and action plan to address any areas of weakness identified. This report can be used to complete your company’s annual return.

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