All companies and close corporations are required in terms of the Companies Act 71 of 2008, to lodge their annual returns with the Companies and Intellectual Property Commission (CIPC) every year. Failure to do so will be viewed as an indication to the CIPC that the company or close corporation is not doing business or is not intending on doing business in the near future.

Most companies or close corporations that have accountants or auditors feel secure in knowing that they no longer have to worry about their statutory filings and can instead continue to focus on growing their business. However, auditors and accountants typically ensure that your income tax returns are in order and have been correctly filed with SARS, but not that your company or close corporation’s annual returns are filed with the CIPC.

Your annual return discloses your turnover for the last financial year to the CIPC, however, even if your company or close corporation does not produce an annual turnover or if your company or close corporation is dormant, your annual returns must be filed with the CIPC if you intend on doing business in the future. If the CIPC assumes that the company or close corporation is not doing business or is not intending on doing business in the near future, it will commence with the deregistration of your company or close corporation and, if the filing of annual returns is not attended to for a long period of time, the CIPC could place your company or close corporation in final deregistration.

Final deregistration means that you will be unable to trade under your company or close corporation’s name since its juristic personality will have been withdrawn and the company or close corporation will have ceased to exist. Any agreements entered into by the company or close corporation while in deregistration would be invalid, and, where a company or close corporation has been deregistered and still continues trading, directors of the company or members of the close corporation can be held personally liable for any action taken against the company or close corporation during the deregistration period. Even if the company or close corporation is subsequently re-instated, such reinstatement will not apply retrospectively, and will therefore not absolve the directors or members of liability.

You have 30 (thirty) business days from the anniversary of your company’s registration date to lodge your annual returns before you are in non-compliance with the Companies Act.

Should you require any assistance in attending to the submission of your annual returns, please do not hesitate to contact our Commercial Department at Kevind@kisch-ip.com or Merciaf@kisch-ip.com or 011 324 3025/33 with any queries or for further information.