Topic 3: CIPC Returns
Sam and Joseph as well as yourselves will now go through this topic: CIPC Returns
TOPIC LEARNING OUTCOMES
At the end of this module, you, the entrepreneur, should be able to:
- What is the CIPC and their role
- What are annual CIPC returns and its importance
- How to submit CIPC returns
WHAT IS CIPC?
The Companies and Intellectual Property Commission (CIPC) is an agency of the Department of Trade and Industry in South Africa.
THE FUNCTION OF THE CPIC
The function of the CIPC is as follows:
WHY IS IT IMPORTANT TO SUBMIT YOUR CIPC RETURNS?
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 for the filing of such annual returns is to confirm whether a company or close corporation is still in business/trading, or if it will be in business in the near future. The annual return may be regarded as a type of annual “renewal” of the company or close corporation registration.
Therefore, if annual returns are not filed within the prescribed time period, the assumption is that the company or close corporation is inactive, and as such CIPC will start the de-registration process to remove the company or close corporation from its active records. The legal effect of the de-registration process is that the juristic personality is withdrawn, and the company or close corporation ceases to exist.
HOW TO SUBMIT A RETURN?
Annual returns can only be filed electronically via the provided application on the CIPC website.
For the step by step guide on how to file annual returns kindly click on the link below:
CIPC does provide e-mail / sms reminders to directors (for companies) and members (for close corporations) PROVIDED that correct contact details have been provided to the CIPC when registering the business or updating its detail. If CIPC does not have the correct information, reminders cannot be issued. To confirm the status with annual return filings an AR Fee Calculation can be done via www.annualreturns.cipc.co.za or by utilising the CIPC USSD functionality.
In determining the appropriate fee for the filing of an annual return, a distinction must be made between a company and close corporation filing, and the date on which the annual return became due, since different fee structures are used for companies and close corporations. Additionally, in order to determine the year from which the company or close corporation became liable to file annual returns, the roll out date for the specific category of entity must be used together with its registration date.
Below is a view of the applicable fees provided by the Companies Act
Companies Act, 1973 fee table
| Annual Turnover | Private and Incorporated Companies | Public Companies | External Companies |
| Less than R10 million | R450 | R4000 | R4000 |
| More than R10 million but less than R50 million | R2500 | R4000 | R4000 |
| R50 million or more | R4000 | R4000 | R4000 |
| Penalty fee for each late lodgment | R150 | R150 | R150 |
| Re-instatement Application (Form CoR40.5) | R200 |
Companies Act, 2008 fee table:
| Annual Turnover | Filing within 30 business days after anniversary date | Filing more than 30 business days after anniversary date |
| Less than R1 million | R100 | R150 |
| R1 million but less than R10 million | R450 | R600 |
| R10 million but less than R25 million | R2000 | R2500 |
| R25 million or more | R3000 | R4000 |
| Re-instatement Application (Form CoR40.5) | R200 |
Close Corporations Act, 1984 fee table:
| Annual Turnover | Filing within 2 months from beginning of anniversary month | Penalty for each late lodgment |
| Between 0 to R50 million | R100 | R150 |
| R50 million and above | R4000 | R150 |
| Re-instatement Application | R200 |
The fees payable for annual returns can also be determined by consulting the CIPC Annual Return website www.annualreturns.cipc.co.za / AR Calculator. For assistance on how to conduct a fee calculation refer to the published step by step guide www.annualreturns.cipc.co.za / how to guide.
WHAT HAPPENS IF YOU DON’T FILE YOUR RETURNS?
As indicated above, there are cost implications for late filings. Continuous non-filing will result in the company or close corporation being placed into deregistration and eventually being finally deregistered. During the deregistration process or final deregistration, government departments, SARS, banks and other organisations or the service providers of the company or close corporation may refuse to do business with the company or close corporation until such time that outstanding annual returns have been submitted.
Deregistration will be automatically triggered by the CIPC when two or more successive annual returns are outstanding. During deregistration companies and close corporations will be notified by registered mail or alternative electronic methods of communication of the pending deregistration. The contact details as per the CIPC records will be used to communicate the business status. If your contact details are outdated or incorrect, you will not receive such notification.
If finally, deregistered, the business will have to be re-instated first before it can continue doing business
CONCLUSION
Annual returns are used to determine whether the business is still doing business or will be doing business in the future. If annual returns are not filed, CIPC assumes that the business is dormant and starts the process to remove the business from the register of active businesses. Also, annual returns may be used to gauge the level of compliance with the Companies Act especially financial reporting.
Having been through this topic, Sam and Joseph went on ahead and completed the post topic knowledge assessment in order to test their knowledge retention and understanding. As such, you can notice from the graphs above that Sam and Joseph have now retained a similar value in knowledge within this module already. Joseph went a step further though and completed his Annual Returns to CIPC. It took him a lot of time get his Annual Returns submitted but he understood the value of it. As such, Joseph is now in a better scoring and position to be recognized by an organisation. After completing his Annual Returns and uploading it onto his business health dashboard, Joseph was contacted by a procurement official in order to submit all of his compliance information. Due to not having all of his other information ready, Joseph was excluded from the procurement process. Sam is now still keen to see the process through.