The CIPC has issued an upgrade with reference to its previous Notice 52 of 2019 for South African companies, which is to complete a compliance checklist online before submitting annual returns. Now, the CIPC has enhanced the compliance checklist by adding a new section to confirm if the companies’ annual financial statements are audited or independently reviewed or not. You can find this when you log in to CIPC’s e-services page, go to Transact and find the Compliance Checklist icon.
The enhancement has been added from the date of the notice, which is 5th March 2020 and is mandatory for the following types of companies –
- Incorporated – Inc. (21)
- Proprietary Limited – (Pty) Ltd (07)
- Limited – Ltd (06)
- State-Owned Company – SOC (30)
- Non-Profit Company – NPC (08)
The Implication of the Enhancement
Question: Is your company’s annual financial statements audited or independently reviewed?
Answer: Yes / No
If you select ‘no’, you are not required to complete the compliance checklist. All the active directors of the company, including the person who has filled this, will be sent an email by the CIPC to confirm the answer.
If you select ‘yes’, then you must complete the compliance checklist. After submitting the compliance checklist, all the active directors of the company, including the person who has filled the checklist will be sent an email by the CIPC to confirm the information given about the company.
Selecting the Year of Compliance
The year of compliance is crucial in the checklist because it is aligned to the anniversary date of the company’s incorporation. A company has 30 business days after the anniversary of the company’s date of incorporation to submit the compliance checklist to the CIPC. This might be a bit challenging practically, so it is important to put a process in place to ensure timely submissions starting with finding out when the annual return is due.
Another improvement in the checklist is the addition of comment boxes for each question in case the companies wish to explain their specific answers to the CIPC. Earlier, there was just a yes/no option to choose from and the companies could not elaborate the reason for their chosen answer anywhere, which may have led to misunderstandings. So now, the comment boxes will be very useful in ensuring clarity of answers and references.
With regular updates by the CIPC to streamline the compliance process, it will become easier for all the parties involved to meet their respective objectives and comply with the mandatory requirements of the Companies Act. Should there be any difficulties in doing so, you can connect with regulatory reporting experts like DataTracks by sending an email to email@example.com.
If incorrect information is submitted, you can send an email to COR135.firstname.lastname@example.org to explain why incorrect information was submitted and why it should be rectified and CIPC will consider it.
In the meantime, do not let your company get deregistered. It is mandatory to complete the checklist and ensure the annual reports are in on time.