Recommencement of deregistration referrals by the CIPC due to non-compliance with Annual Returns: What you need to know
Introduction
As of 1 September 2024, the Companies and Intellectual Property Commission (CIPC) will resume the process of referring non-compliant companies and close corporations for deregistration due to failure to file Annual Returns. This move is part of the CIPC's mandate to maintain an up-to-date registry of active entities and to streamline the deregistration process for those who fail to comply with statutory requirements.
Why This Matters
Filing Annual Returns, along with the Beneficial Ownership Declaration and Annual Financial Statements (AFS/FAS), is a legal obligation for all companies and close corporations. Non-compliance with these requirements not only attracts penalties for late filing but also leads to the risk of deregistration. The CIPC has emphasized the importance of timely compliance, highlighting that companies and close corporations must adhere to the deadlines and directives issued in notices by the Commission.
Enhanced Deregistration Process
From 1 September 2024, the period between a referral for deregistration and the final deregistration of non-compliant entities will be significantly reduced. This enhancement aims to expedite the deregistration process, ensuring that the CIPC's registry remains current and accurate. The changes underscore the importance of maintaining compliance to avoid the potential consequences of deregistration.
Key Points to Consider
Electronic Notices: All notices related to deregistration due to non-compliance with Annual Returns will be sent electronically to the contact details of active directors, members, and company secretaries. It is crucial that these individuals ensure their contact information, including cell phone numbers and email addresses, is up to date with the CIPC. Shared contact details or those of service providers are not permitted; each individual must provide their personal contact information.
Responsibility for Compliance: Directors, members, and company secretaries are ultimately responsible for ensuring compliance with relevant legislation. This responsibility cannot be delegated to others, including service providers. Failure to comply with these obligations can lead to deregistration and other legal consequences.
Reinstatement after Deregistration: If a company or close corporation is deregistered, it may apply for reinstatement, provided it meets specific requirements, including proof that the entity had economic value at the time of deregistration. Detailed information on the reinstatement process can be found on the CIPC website.
New Download Functionality for Deregistration Notices
As part of the recent enhancements, the CIPC will introduce a new download functionality for deregistration letters via its e-Services and BizPortal platforms. This service will allow active directors, members, or company secretaries to download deregistration notices free of charge for six months after the notice is issued. After this period, a fee will apply.
Accessing the Service:
e-Services: Log in using your customer code and password, then navigate to "More Services" under the main service dashboard to find "AR Deregistration Letters."
BizPortal: Log in and access the service directly from the main service dashboard.
Important Notes:
The service only applies to deregistration notices issued for non-compliance with Annual Returns from 1 September 2024 onward.
It does not include access to final deregistration letters or notices from previous periods.
Service providers and third parties must follow specific procedures to obtain access to these notices, including providing a mandate from the concerned company or close corporation.
Conclusion
The CIPC's recommencement of referral for deregistration due to non-compliance with Annual Returns is a crucial reminder for all companies and close corporations to stay vigilant and ensure that they meet their statutory obligations. Non-compliance can lead to significant penalties, legal consequences, and the potential dissolution of the entity. With the enhanced deregistration process and new electronic systems in place, there is no better time to review and update your compliance practices.
For more detailed information, visit the CIPC website or contact their support services to ensure your company remains in good standing.