Clients are reminded of the requirements relating to the submission of annual returns, and the new procedure for re-instatements that must be followed as from 1 November 2012.
An annual return is a summary of the most relevant information pertaining to a company and close corporation. By lodging annual returns companies and close corporations ensure that the Companies and Intellectual Property Commission (CIPC) is in possession of the latest information. It also confirms that the entity is still in business or will be doing business in the near future.
All companies (including external companies) and close corporations are required by law to lodge their annual returns with CIPC within a certain period of time every year. An annual return is a statutory return in terms of the Companies and Close Corporations Acts and therefore MUST be complied with.
To submit an annual return the following forms need to be completed:
· CoR30.1 (Annual Return) and;
· CoR30.2 (Financial Accountability Supplement)
Completion of these forms requires the disclosure to the CIPC of certain information about the entity. This information varies, from details such as the number of persons employed, to the particulars of the person primarily responsible for recording day-to-day financial transactions and maintaining the financial records of the business. To submit annual returns on behalf of our clients we require them to provide the necessary information to us, should we not already have access to this information.
Failure to file an annual return within the prescribed time period will result in the CIPC assuming that the company or close corporation is not doing business or is not intending to do business in the near future, and is therefore inactive. This will lead to deregistration of the entity, which has the legal effect that the juristic personality is withdrawn and the entity ceases to exist. In this event the property of the entity becomes “ownerless” and might be vested in the state unless the entity is re-instated.
It should be noted, however, that the CIPC will no longer re-instate a company or close corporation based solely on a statement that it is in business, or will be in business in the near future. Re-instatements are reserved for entities which can prove that they were in business at the time of deregistration, or have outstanding assets and/or liabilities which must be transferred or liquidated.
The CIPC’s Practice Note 6 of 2012, issued in accordance with the regulations under the Companies Act, 2008, details the requirements for a re-instatement application, effective as from 1 November 2012. Regardless of the cause or date of deregistration, an application must be submitted on an original signed form CoR40.5, and must be accompanied by the following documentation:
1. Certified ID copy of the applicant (director/member);
2. Certified ID copy of the customer filing the application;
3. Deed search (reflecting ownership, or not, of immovable property);
4. Letters from National Treasury and the Department of Public Works, indicating these such departments have no objection to re-instatement, if it has immovable property;
5. Advertisement in a local newspaper giving 21 days’ notice of proposed application for re-instatement;
6. Affidavit indicating the reasons for the non-filing of annual returns, if deregistration was due to non-compliance in relation to annual returns;
7. Affidavit indicating the reason for the original request for deregistration, if the company or close corporation itself applied for deregistration; and
8. Sufficient documentary proof indicating that the company or close corporation was in business or that it had any outstanding assets or liabilities (e.g. property, intellectual property rights) at the time of deregistration.
On successful processing of the re-instatement application, all outstanding annual returns must be filed in order to complete the process.
It is clear from the above overview that the new system will be more administratively demanding and may lead to an additional fee in order to comply with the relevant legislation.
You are welcome to contact Marisa Viljoen on 021 840 1600 or email@example.com should you require more clarity in this regard.