All companies (including external companies) and close corporations are required by law to file their annual returns within a certain period of time every year. CIPC will remind companies and close corporations annually to file their annual returns provided that CIPC has the correct electronic contact information of directors and members. 

An annual return is a statutory return in terms of the Companies and Close Corporations Acts. Failure to file annual returns results in the CIPC assuming that the company and/or close corporation is not doing business or is not intending doing business in the near future. Non-compliance with annual returns, beneficial ownership declaration and AFS/FAS will lead to deregistration, which has the effect that the juristic personality is withdrawn, and the company or close corporation ceases to exist. Active directors of companies and active members of close corporations may still be held liable for actions taken during their tenure and while the company or close corporation was in business.

When filing the annual return, the company or close corporation MUST also file its latest Beneficial Ownership declaration as well as its Audited Financial Statements (AFS) or Financial Accountability Supplement (FAS).

• Close corporations have, from the first day of its anniversary month up until thereafter, to file annual returns before they are considered non-compliant with the Close Corporations Act. Late filing will result in penalties being incurred.
• Companies have 30 business days from the date when annual returns become due to file annual returns before they are considered non-compliant with the Companies Act.  Late filing will result in penalties being incurred.

What will happen if the company or close corporation does not comply with annual returns?

• The CIPC will assume that the company or close corporation is inactive, and as such CIPC will start the deregistration process to remove the company or close corporation from its active records. The legal effect of deregistration is that the juristic personality is withdrawn, and the company or close corporation ceases to exist.
• Other organizations e.g. banks, Central Supplier Database, service providers may refuse service since the company or close corporation no longer exists. Directors and members active at the time of deregistration may be held liable for all debts.

When must a company or close corporation file its annual returns?

It is an annual filing and it differs for companies and close corporations. Companies must file (regardless as to whether it was active or not) within 30 business days starting from the day after its date of registration. Close corporations must file (again regardless as to whether it was active or not) starting from the first day of the month it was registered up until the month thereafter. It may still file after such period, but an additional penalty fee will be applicable.

What is the annual return used for?

Annual returns are used to determine whether the business is still doing business or will be doing business in the future.  If annual returns are not filed, CIPC assumes that the business is dormant and starts the process to remove the business from the register of active businesses.  Also, annual returns may be used to gauge the level of compliance with the Companies Act especially financial reporting.

What is Beneficial Ownership?

In respect of a company, means an individual (warm body) who, directly or indirectly, ultimately owns that company or exercises effective control of that company.

Who is a Beneficial Owner?

An individual/ natural person who, directly or indirectly, ultimately owns 5% and more of a company or exercises effective control of a company.

What is the minimum Threshold before a person can be considered a Beneficial Owner?

5% (five percent) – shareholding, beneficial interest, voting rights, etc.

From 01 April 2023, how long do we have for all entities to file BO Information?

Entities incorporated before 24 May 2023, must file the required information within 30 days from its anniversary date (FYE). Entities incorporated after 24 May 2023, must file their BO-information within 10 (ten) days of incorporation, as applicable.

After filing the BO Information, and receiving a confirmation certificate, does it mean the filing is complete?

Yes, the filing is complete and the entity is considered BO-compliant, however, the Commission reserves the right to make further enquiries, validate and verify information submitted and request further documentation.

If there are no changes to the BO Information during a financial year, is the company expected to file annually?

Yes, every company prescribed to file, must ensure the register is up to date, including making annual filings confirming validity of the filed information.

If the details of the BO changes, can the BO filing be done any time?

Yes, whenever there are changes on the BO, a company has 10 (ten) days to update its BO/securities register – Regulation 32(3A) (non-affected companies) AND Regulation 32A (affected companies).

What is an affected company?

It is a regulated company as set out in section 117(1)(i) and a private company that is controlled by or a subsidiary of a
regulated company as a result of any circumstances contemplated in section 2(2)(a) or 3(1)(a).
• An affected company includes-
• A public company;
• A state-owned company;
• A private company – in terms of the transfer of securities when exceeding the percentage prescribed by Minister (10%)
within a 24-month period;
• A private company that is controlled by an affected company (regulated company) or is a subsidiary of an affected
company.

The Companies and Intellectual Property Commission (CIPC) emphasizes the need for accurate details of foreign nationals on the Foreigner Assurance platform.

Correctly capturing this information is vital for maintaining the integrity of the company registry and ensuring compliance with security measures and public regulations. This is particularly important for verifying the eligibility of directors and members to prevent involvement in illegal activities.

Ensuring the correct identification of foreign nationals is crucial in applying security measures and adhering to public regulations, particularly in relation to the appointment of directors and members who may be disqualified due to suspected involvement in activities such as terror financing, money laundering, and other offences. The assurance of such information is therefore of national importance.

A custom domain or a custom URL is a unique branded link to your website or to a platform where you host your content. The custom domain also allows you to create branded email off your custom domain name like info@sb-consulting.co.za. This helps your company, brand or side hustle to look trustworthy and professional.