The Companies and Intellectual Property Commission (“CIPC”) has issued Notice 52 of 2019 announcing that new requirements will apply for companies to declare their compliance status to specific sections of the Companies Act 71 of 2008 (as amended) (“Companies Act”), which will be required to be submitted with the Annual Return of the company.
The Compliance Checklist has been introduced by the CIPC to ensure compliance by companies of the mandatory requirements of the Companies Act and to educate the directors of companies on the specific requirements of the Companies Act.
The Compliance Checklist will be used by the CIPC to monitor and regulate proper compliance with the Companies Act. If the CIPC notice any trends of non-compliance they will act accordingly. Penalties for non-compliance is determined by Section 216 of the Companies Act and could include an administrative fine.
As from 1 January 2020 the CIPC Compliance Checklist will become mandatory to complete before submitting a company’s Annual Return with the CIPC. Section 33(1) of the Companies Act states that every company must file an Annual Return in the prescribed form, with the prescribed fee, and within the prescribed period after the anniversary of the date of its incorporation. At this stage the Compliance Checklist will be applicable to public companies, private companies, state owed companies and non-profit companies.
Compliance with the Companies Act is mandatory and directors have a duty to ensure that the company complies with the relevant sections of the Companies Act at all times. Therefore, there is no escaping the requirement of mandatory compliance in respect of the submission of the Compliance Checklist with the company’s Annual Return.
Associate: Corporate Statutory, Johannesburg