When must I submit my company’s annual return with the Companies and Intellectual Property Commission (“CIPC”)?
All companies are required by law to file their annual returns with the CIPC on an annual basis, within 30 business days after the anniversary date of its incorporation.
Which set of financial statement details must I lodge with my company’s annual return?
A company must lodge the turnover figures in terms of the latest approved financial statements available.
Must I submit an annual return with CIPC if my company is dormant?
Yes, all companies are required to lodge an annual return with CIPC, even if the company is dormant.
Must an external company file an annual return?
Yes, an external company must file an annual return together with the prescribed fee within 30 business days after the anniversary date of its registration as an external company.
What is the difference between an executive director and a non-executive director?
An executive director needs to be an employee of the company and on the payroll whereas a non-executive director is not an employee of the company, and is not involved in the day to day running of the company.
Memorandum of Incorporation
What is a MOI?
“MOI” is an abbreviation for “Memorandum of Incorporation”. The MOI is the governing document of a company and sets out the rights, duties and responsibilities of shareholders, directors and other persons involved in a company. More details here
What are authorised shares versus issued shares?
Authorised shares of a company are the maximum number of shares that a company is authorised by its MOI, to issue to shareholders.
Issued shares of a company is the total of a company's shares that are held by the shareholders. A company can, at any time, issue new shares up to the full amount of authorised shares available.
Social and Ethics Committee
Must a private company establish a Social and Ethics Committee?
Generally speaking, the answer is no unless the company has in any of the past two years, scored more than 500 points in terms of its Public Interest score (“P I score”).
Public Interest Score
What does a company’s Public Interest score mean?
The P I Score of a company is the interest which the public and investors have in a company. The P I score is determined according to certain criteria and points are awarded according to parameters set in terms of the Regulations of the Companies Act.
Every company must calculate its P I score at the end of each financial year.
Deregistration of Companies
If the CIPC places my company in deregistration process due to the non-filing of its annual returns, what is the remedy to overcome the problem?
All outstanding annual returns must be filed and the outstanding prescribed fees and any penalties, must be paid to the CIPC, who will then change the status of the company from “AR Deregistration Process” to “In Business”.
Must I appoint an auditor in respect of my company?
If a private company, or a personal liability company or a non-profit company is required by the Companies Act or the Regulations or in terms of its MOI to have its annual financial statements audited every year, the company is required to appoint an auditor.
Can a foreign national be appointed as a Public Officer of a Company?
Yes, a foreign national can be appointed as a Public Officer of a company. However, it is important to note that the Public Officer must reside in the Republic of South Africa.
Can my attorney or auditor’s business address be used as the registered address of a company?
The company’s registered address should be the address where the business is administered from and can not be assumed to be that of a third party.
I hear Close Corporations are being phased out. Do I need to convert my entity to a Company?
In terms of the new Companies Act, no new Close Corporations can be formed. Those in existence may continue. However, CIPC has made it clear that they are wanting to do away with Close Corporations. No date has been set for this but if you intend using the Close Corporation long term, it is advisable to convert to a company.
Endorsement of Share Certificate as non-residentDORSEMENT OF SHARE CERTIFICATE AS NON-RESIDENT
I formed a company three years ago. The auditors picked up that the share certificate is not endorsed as non-resident and the share holder is a foreign trust. How do I rectify this?
One would need to supply the bank (which ever bank you bank with have foreign exchange agents who will assist and we have contact details for most banks) a proof of payment for the shares, a covering letter detailing the transaction that gave arise to the shares, the original share certificate, any related resolutions or information that the bank might request. Once they have all the documents, they review this and the endorsement is put in place.