One question that the directors of all companies should be asking themselves in 2020 – Is my company compliant? Since 2018, the CIPC has been working towards establishing various systems to ensure compliance with the Companies Act. In August 2019, the CIPC took another step in this direction by introducing the compliance checklist. As of 1st January 2020, the CIPC has made the checklist a mandatory requirement in the submission of annual returns.
According to the CIPC, all private companies, personal liability companies, state-owned companies, public companies and non-profit companies are included in this mandate.
What is the checklist?
The checklist is basically a questionnaire relating to various sections of the Companies Act 71 and the answers (in yes/no/not applicable format) indicate the company’s compliance or non-compliance with these.
Please note that the questions are applicable for your previous calendar year and have to be submitted to the CIPC before this year’s annual returns.
Compliance questions covered
Certain sections covered in the checklist that the CIPC would like to know the answers to are Section 4 (Solvency and Liquidity), Section 30 (Annual Financial Statements) and Shareholder Agreements and Rules.
Main objectives of this checklist
With this checklist, the CIPC aims to achieve the following –
- Monitor compliance with the mandatory requirements of the Companies Act described in Section 15, by companies
- Educate the directors, company secretaries, and auditors, regarding their responsibilities in relation to the Companies Act;
- The CIPC will utilize the checklist to monitor and regulate proper compliance with the Companies Act and if trends of non-compliance appear, they will take necessary actions.
Way forward for directors
All companies under the regulation of the Companies Act have to comply and it is the duty of the directors to ensure this compliance at all times. Since the compliance checklist has now become mandatory, directors cannot avoid it any further. The checklist has to be completed before submitting the annual return.
Step 1: Check the date when your annual return is due (this varies for different companies)
Step 2: Logon to the CIPC website and find the compliance checklist under the Transact page by e-Services
Step 3: Fill out the checklist on your own or speak to a DataTracks executive and we will guide you through the process
The answers must be true and accurate. The person completing the questionnaire must have a complete understanding of the Companies Act and of the relevant sections too.
We suggest taking professional help because dropping a ball on this has greater consequences than one can imagine. If the compliance checklist is not complete, you cannot submit your annual returns. This means your company might get deregistered because, without annual returns, the CIPC might think that your company has stopped doing business altogether.
Any questions, explanations or corrections relating to the compliance checklist can be emailed to COR135.email@example.com.
DataTracks can guide you through the compliance checklist and make the process a lot easier for your company. You can get in touch with us at firstname.lastname@example.org.