Be ready for new CIPC (Companies and Intellectual Property Commission) requirements which kick in from January 2020. They apply to all companies and failure to comply will put your company at risk of deregistration - with all the resultant negative consequences for your company, for your business and for you personally.
When you come to complete your company’s Annual Return next year (we’ll explain how to find out when your deadline for that will be) you will find that you must first complete a questionnaire/checklist designed by the CIPC to ensure that you are complying with Companies Act requirements.
We’ll take you through this new requirement and how you will access the questionnaire, plus we share a list of the main areas of compliance it will cover.
The Companies and Intellectual Property Commission (CIPC) has announced new requirements for companies and close corporations when completing their Annual Returns.
From 1 January 2020 it will be mandatory to complete a compliance questionnaire when submitting the Annual Return.
The rationale for the questionnaire
The CIPC will use this questionnaire to assess areas of non-compliance with the Companies Act (“the Act”) and will take action where it sees the need to address any weaknesses.
It also serves to ensure that directors and officers of companies know and understand the mandatory compliance aspects of the Act.
If you don’t complete the questionnaire, then you won’t be able to file the Annual Return.
What is in the questionnaire?
You are asked to state whether you comply with a list of important areas of the Companies Act (for smaller companies, you can mark quite a few of these as non-applicable).
The main areas covered are:
It is an offence to make a false declaration to the CIPC, so when doing this for the first time, make use of your accountant’s services.
When to submit the Annual Return
Companies are required to submit their Annual Return in the thirty business days after the anniversary of their date of incorporation – i.e. if the company was incorporated on 10 June then you have thirty business days from 11 June to complete the return.
Close Corporations have the two months from the first day of their month of incorporation to submit their returns i.e. if your date of incorporation is 10 June, then the Annual Return needs to be in on or by 31 July.
Don’t forget Annual Financial Statements (AFS) must be submitted, in XBRL format, with the Annual Return. If the date for your Annual Return falls before you have finalised your current AFS, then submit last year’s AFS.
If you fail to submit an Annual Return, the CIPC will take this to mean your company is no longer active and will begin company deregistration proceedings – the last thing you need is to find your company effectively doesn’t exist so make sure you acquaint yourself with these new requirements and ask your accountant for advice in any doubt.
The compliance checklist
WHY THE COMPLIANCE CHECKLIST?
To ensure compliance of the mandatory requirements of the Companies Act such as described in section 15, – requiring every company to have a MOI.
Serves as an educational tool for directors and company secretaries, in guiding them with regards to their responsibilities in terms of the Companies Act.
CIPC will utilise the Checklist to monitor and regulate proper compliance with the Companies Act and if trends of non–compliance appear, to act accordingly.
ONLY APPLICABLE TO THE FOLLOWING CATEGORIES OF COMPANIES
Incorporated – Inc. (21)
Proprietary Limited – (Pty) Ltd (07)
Limited – Ltd (06)
State owned company – SOC (30)
Non–Profit Company – NPC (08)
This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted. (E&OE)