All companies, including non-profit companies, external companies and close corporations, by law have to file annual returns once every year within the required time frame as regulated by the Companies and Close Corporations Act.
By filing the annual return with the Companies and Intellectual Property Commission (CIPC) the company confirms whether they are still in business or trading, or if it will be in business in the near future.
An annual return is a statutory return in terms of the Companies and Close Corporations Acts and is a summary of the most relevant information pertaining to a company and close corporation.
The prescribed filing fees for annual returns are legislated, and as such cannot be waived by the CIPC. The fee payable to the CIPC is calculated based on the annual turnover of the company.
When a company fails to submit its annual return, the CIPC will assume the company is no longer trading and will start with the deregistration of the company. Once a company has been deregistered, the CIPC removes the company from its active records. Legally, the company will now cease to exist and the company name will become available to the general public for registration.
Once the company is in the deregistration process due to the non-payment of annual returns, it is possible for the deregistration process to be cancelled if all outstanding annual returns are paid up to date, including the penalties incurred due to the late payment.
If however the company is in final deregistration, then the company can apply for re-instatement upon filing of the required documentation. If the application is successful and all re-instatement criteria are met, the CIPC will change the status of the company to “in re-instatement process”, at a prescribed fee.
To keep your company in good standing with the CIPC and to avoid any penalties, possible deregistration, or the aggravation of trying to re-instate the company, every company is advised to lodge their annual returns timeously within the stipulated time frame.
Extracts taken from www.cipc.co.za
Corporate Statutory Department, Johannesburg