Annual returns: What Are They?

• Shelf companies
• Annual returns of companies and CC’s
• Share capital amendments
• Yearend & registered address changes for companies or CC’s
• Beneficial ownership declarations
• New company registrations
• New non-profit and external companies
• Directors, auditors & public officer amendments
• Company register maintenance & updates
• Business registration
• Reinstatement of companies & CC’s
• Company & CC name changes
• Special resolutions
• Memorandum of incorporation (MOI)
• Deregistration of companies & CC’s
• Company & CC annual duties
• Conversions of CC’s to private companies

All companies (including external companies) and close corporations are required by law to file their annual returns with the CIPC on an annual basis, within a prescribed time period. The purpose of the filing is to determine whether a company or close corporation is still in business/trading, or if it will be in business in the near future.

If these returns are not filed within the prescribed time period, the assumption therefore is 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 The legal effect of this deregistration process is that the juristic personality is withdrawn and the company or close corporation ceases to exist.

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 The legal effect of the deregistration process is that the juristic personality is withdrawn and the company or close corporation ceases to exist.

Companies and close corporations are required to file once a year within a specified time period. Companies must file within 30 business days after the anniversary date of its incorporation, while close corporations must file within the anniversary month of its incorporation up until the month thereafter.

A clear distinction must be made between an annual return and a tax return. The prior is a form of “renewal” and affirms to the CIPC that it is in possession of the most up to date information of a company or close corporation and that the entity is still conducting business. A tax return is filed with SARS and focuses on taxable income of a company or close corporation in order to determine the tax liability of the entity to the State.

Compliance with the one does not mean that there is automatic compliance with the other. It is two different processes administered in terms of different legislation by two different government departments. Therefore, even if the tax return has been filed with SARS, the annual return must still be filed with CIPC.

No. It is not an amendment form and therefore, the annual return must be followed by the appropriate statutory form to update the CIPC registers after filing if CIPC is not in possession of the most up to date information. An example of this is if a company’s address changes, a form CoR21.1 must still be completed and submitted to CIPC.

Yes. The Close Companies Act, 2008 (and its predecessor Companies Act, 1973) and Corporations Act, 1984 does not make a distinction between an active and inactive company or close corporation. Therefore, even if the company or close corporation was inactive, it is still legally required to file and pay these returns.

A company or close corporation must use its latest approved financial statements to determine the turnover for purposes of filing.

• in the ordinary course of its business, it holds assets in a fiduciary capacity for persons who are not related to the company, in excess of R5 million in value at any time during the year;
• it is a non-profit company and was directly or indirectly incorporated by the state, a state-owned company or foreign entity;
• it is a non-profit company and was incorporated primarily to perform a statutory or regulatory function in terms of any legislation or to carry out a public function; or
• its public interest score in that financial year, as calculated in accordance with Regulation 26 (2), is 350 or more or is at least 100 if its AFS have been internally compiled.
• Any other company must have its AFS reviewed independently in accordance with ISRE 2400 unless –
  • it is exempt, in terms of section 30 (2A) to have its AFS audited or reviewed for that year (every person who is a holder or has a beneficial interest in any securities issued is also a director of the company);
  • it is required by its own Memorandum of Incorporation (“MoI”) to have its AFS audited; or
  • it has voluntarily had its AFS audited for that year. A company that is required to have its AFS audited, as indicated above, must file a copy of its latest approved audited AFS while a company that is not required to have its AFS audited as indicated above, may file a copy of its audited or reviewed AFS.

In determining the appropriate fee for the filing, a distinction must be made between a company and close corporation filing, and the date on which the submission is due, since different fee structures are used for companies and close corporations.

Further, in order to determine the year from which the company or close corporation became liable to file, the roll out date for the specific category of entity must be used together with its registration date.

Public and external companies – rolled out August 2003

Private and incorporated companies – rolled out May 2005

Close corporations – rolled out September 2008

Non-profit companies – rolled out May 2011