WHAT IS THE NEW CIPC COMPLIANCE CHECKLIST?
The Companies and Intellectual Property Commission’s (“CIPC”) Annual Return is a statutory requirement in Section 33(1) of the Companies Act 71 of 2008 (as amended) (“Companies Act”), that 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. All companies and close corporations are required by law to lodge their Annual Returns with the CIPC.
The CIPC has issued Notice 52 of 2019 on 13 August 2019, announcing that new requirements will apply for companies to declare their compliance status to specific sections of the Companies Act in the form of a CIPC Compliance Checklist (“Checklist”), which will be required to be submitted with the Annual Return of the company. The purpose is to monitor and regulate proper compliance with the Companies Act and if trends of non-compliance appear, to act accordingly.
When is it effective?
As of 1 January 2020 the Checklist is mandatory to be completed.
This Checklist will only be applied to your previous calendar year and will be submitted to CIPC when you submit your annual return. Thus, if you submit your 2020 CIPC Annual Return, then your Questionnaire and answers will be based on your previous (2019) calendar year.
Who needs to comply?
The Checklist is applicable to:
- Personal Liability Companies (Inc)
- Proprietary Limited Companies (Pty) Ltd
- Limited Companies (Ltd)
- State-owned Companies (SOC)
- Non-Profit Companies (NPC)
At this stage, the checklist does not apply to close corporations.
What if a company does not comply or provides false information?
A person commits an offense who knowingly provides false information to the CIPC will be liable to either pay a fine or imprisonment for a period not exceeding 12 months or to both a fine and imprisonment.
From the 5th of March 2020:
- It is mandatory for the following types of companies, i.e. Incorporated – Inc. (21); Proprietary Limited – (Pty) Ltd (07); Limited – Ltd (06); State-Owned Company – SOC (30); Non-Profit Company – NPC (08) to confirm if the company’s annual financial statements are audited or independently reviewed.
- If you have confirmed “no” that your company’s annual financial statements are not audited or independently reviewed you will not be required to completed the Compliance Checklist. An email will be sent to all active directors and to the person who submitted this information confirming this.
- If you have confirmed “yes” that your company’s annual financial statements are audited or independently reviewed you must complete the Compliance Checklist.
- Upon submitting the Compliance Checklist, an email will be sent to all active directors and to the person who submitted the Compliance Checklist confirming the information sent on behalf of the Company.
- Reference to Compliance Year in the Compliance Checklist is aligned to the anniversary date of a company’s incorporation.
- The Compliance Checklist is a standalone service and the information required must therefore be submitted by a company to the CIPC within 30 business days after the anniversary of the company’s date of incorporation.
- The Compliance Checklist now contains a comment box for each question, should companies wish to explain their specific answers given to the CIPC.
How can AFA help?
AFA assists clients in lodging Annual Returns with CIPC and will also now offer to assist clients in lodging the Checklist with CIPC before submitting Annual Returns.
AFA will make available to all our clients a similar checklist with relevant background information on the specific sections to assist in completing the Checklist.
It should be noted that it remains the responsibility of the Company and its Directors to ensure that the correct information is provided in the checklist and the Company and its Directors will be liable for the information contained within the checklist.
Further information is available on the CIPC website: http://www.cipc.co.za/files/2115/7347/6839/CIPC_COMPLIANCE_CHECKLIST.pdf
Updated Notice on CIPC website issued on 5 March 2020: http://www.cipc.co.za/files/9115/8341/8386/Notice_9_of_2020_Compliance_Checklist_Enhancement_Scanned_Signed_Version.pdf
If you require assistance in lodging your CIPC Compliance checklist contact: firstname.lastname@example.org
Author: Carmen Arendse