CIPC annual returns, explained properly

What the annual return is

The annual return is not a tax return. It is how you tell CIPC (the Companies and Intellectual Property Commission, the government office that keeps the company register) that your business still exists and its details are current, plus a levy based on turnover. SARS returns are a completely separate process, run by a different department under different law. Being up to date with one says nothing about the other. You need both.

The point of it, in CIPC’s own words, is to work out whether a business is still trading. If nothing arrives, CIPC assumes it is dormant and starts removing it from the register.

Why this one matters more than it looks

It is a small fee and a short form, which is exactly why it gets left. Here is what is actually attached to it.

• Two missed years starts deregistration automatically. CIPC triggers it once two successive returns are outstanding. No human decides; it just starts.
• Deregistration ends the company’s legal existence. Its juristic personality is withdrawn and it ceases to exist. Banks, SARS, the Central Supplier Database and your own suppliers can refuse to deal with it.
• Directors stay on the hook. Directors and members active at the time of deregistration can be held personally liable for the debts, and for actions taken while the business was trading. Closing your eyes does not close the exposure.
• The warning only comes by email. During deregistration CIPC notifies you at the contact details on its records. If those are stale, no warning reaches you at all. Plenty of owners find out at a bank or a tender.
• You cannot fix a mistake afterwards. Once a return is filed nothing in it can be changed. Getting the turnover wrong means a formal credit or debit note application with certified documents, not a quick edit.

It is four filings, not one

This is the part almost nobody is told. An annual return is not a single form. CIPC requires these together, in the same session, and it will not let the return through without them.

1. The annual return itself. Confirming the business is active, and paying the fee for your turnover band.
2. Your beneficial ownership declaration. The list of the actual people who own or control the business. If CIPC does not hold a current one, the annual return stops dead and sends you to file it first. This is the single most common reason a return is “blocked”. Our beneficial ownership guide covers it in full.
3. Financial statements, or a financial supplement instead. If you are required to be audited, your audited statements go in electronically in a format called iXBRL. If you are not, and have not been audited or independently reviewed voluntarily, you complete a Financial Accountability Supplement (FAS) instead, which is a short summary of your figures rather than a full set of accounts.
4. The compliance checklist. Twenty-four questions answered yes, no or not applicable, with comments. Compulsory every year for companies: Pty Ltd, Ltd, Inc, NPC and state-owned. Close corporations do the other three but not this one.

People budget for a R100 fee and a five-minute form, then meet three more filings they have never heard of. Knowing this in advance is most of the battle.

When yours is due

Companies file within 30 business days of the anniversary of registration each year. Close corporations file from the first day of their anniversary month through to the end of the month after. File inside the window and you pay the standard fee. Outside it, the late fee applies, and it is charged separately for every year you are behind.

CIPC does send email and SMS reminders, but only to the directors or members whose contact details it actually holds. If those are out of date no reminder is issued, and that is not accepted as an excuse. Checking that CIPC has a working email and cellphone number for you is a five-minute job worth doing once.

What it costs

• Turnover under R1 million: R100 (R150 late)
• R1 million to under R10 million: R450 (R600 late)
• R10 million to under R25 million: R2 000 (R2 500 late)
• R25 million and more: R3 000 (R4 000 late)

Work out your exact fee with the annual return calculator. The fee must accompany the filing. If it does not, the filing is invalidated and has to be done again.

The questions you will be asked

Across the four filings, this is what you actually have to answer.

• What was your turnover for the year? This sets the fee, so it is the answer that matters most. Use the figures from your latest approved financial statements, not an estimate and not your bank balance.
• Is the business still active? Dormant counts as active for this purpose. You file anyway, with nil turnover.
• Are the registered details still correct? Address, contact details, directors or members.
• Who ultimately owns or controls the business? The beneficial ownership part: whether anyone holds shares on another person’s behalf, and whether anyone outside the directors and shareholders can control the company, appoint or remove directors, or materially influence how it is run.
• Are you required to be audited? This decides whether you upload audited statements or complete the financial supplement instead.
• The twenty-four compliance checklist questions. Each is yes, no or not applicable with a comment, and they run through the parts of the Companies Act a company is expected to be keeping: the solvency and liquidity test (section 4), your memorandum of incorporation and any shareholder agreements (15), access to company records (26), your financial year end (27), accounting records (28), financial statements (29 and 30), correct use of the company name and registration number (32), annual returns themselves (33), and financial assistance for buying shares (44).

Do you actually need an audit? Most small owner-run companies do not. If every person who holds shares is also a director, you are exempt from both an audit and an independent review, unless your own memorandum of incorporation demands one. An audit becomes compulsory if you hold more than R5 million of other people’s assets in trust, or your public interest score reaches 350, or reaches 100 where you prepared the statements in-house. Non-profit companies set up by the state or performing a public function are also caught.

What to have in front of you before you start

• A CIPC customer code and password. Returns can only be filed electronically, through BizPortal, eServices or a CIPC self-service centre. There is no paper option.
• Your latest approved financial statements. Not draft figures. The turnover you declare has to come from these, and it sets the fee.
• Every outstanding year, not just this one. Check the register first so you know exactly how many years you owe before you start paying.
• Your beneficial ownership details. Names, identity numbers, shareholdings, and the date the shares were issued. If this is not already filed, do it first or the return will stop.
• A debit or credit card. CIPC scrapped the old prepaid float for electronic filings, so you pay per filing at the time you file.
• Current contact details on the CIPC record. Both for the reminders and for the deregistration warnings you do not want to miss.

How the filing runs, step by step

1. Check the company’s status and exactly which years are outstanding before you pay for anything.
2. File or confirm beneficial ownership first if CIPC does not already hold a current declaration. The annual return will send you there anyway.
3. Start the annual return and enter the turnover for that year from your approved statements.
4. Complete the financial supplement, or attach audited statements if you are required to be audited.
5. Work through the twenty-four compliance checklist questions.
6. Pay the fee by card. The payment must go through with the filing or the whole thing is invalidated.
7. Repeat for every outstanding year, each with its own fee, then save the filing certificates.

One detail worth knowing: because of privacy law the filing certificate does not show identity numbers, home addresses or contact details, and only the first six digits of a director’s identity number appear on screen. If a bank or a tender asks for proof, the certificate is still the right document to send.

What happens if you skip it

Two successive outstanding returns trigger deregistration automatically. Your status changes to AR Deregistration, and if nothing is done, to AR Final Deregistered. The AR prefix matters: it tells anyone looking that the cause was unfiled annual returns rather than a voluntary closure, which is worth knowing when you check a company you are about to trade with.

Once finally deregistered the company legally ceases to exist. Banks freeze the accounts, and company property can end up bona vacantia, meaning it falls to the state. Directors and members active at the time can be pursued for the debts. Most owners discover all of this at the worst possible moment, mid-tender or mid-sale.

Fixing missed years

While it is still in AR Deregistration. File every outstanding return with its late fee and the deregistration is cancelled. You have to get them in before the date it is finally deregistered, so this is a race worth starting today rather than next month.

If it has been finally deregistered. You apply to reinstate it first, on form CoR40.5. Once that is processed the status changes to “in re-instatement process”, which reopens the door to filing the outstanding returns, beneficial ownership and financial statements. Slower and costlier than acting earlier, but it works.

If the deregistration was voluntary and you want to stop it. That is a different route: an objection letter, signed, emailed to CIPC’s deregistrations address before the final deregistration date. No supporting documents needed.

If you filed the wrong turnover. Nothing in a filed return can be edited. CIPC can credit or debit the customer code used, but only against the financial statements for that year, the entity name and number, a written reason, a certified identity copy of the customer code owner, and a letter giving CIPC permission to adjust the difference, all lodged through its online enquiry system. It is a real application, which is the best argument for getting the turnover right the first time.

Frequently asked questions