The CIPC companies compliance checklist

From 1st January 2020 the Companies and Intellectual Properties Commission (“CIPC”) requires a Compliance Checklist to be completed before Annual Returns can be submitted. This is to ensure compliance of the mandatory requirements of the Companies Act No. 71 of 2008 (the “Companies Act”) and to serve as an educational tool for directors and company secretaries.  The Checklist will be used to monitor and regulate proper compliance with the Companies Act and if trends of non-compliance appear, the CIPC will act accordingly

Resolve Corporate Services (Pty) Ltd (“RSLV”) looks at what is required in the checklist and what companies need to do to ensure compliance.

What does it mean to be compliant? Is your organisation Compliant when it comes to the Companies Act? These are questions’ all directors need to ask themselves. Since 2018, CIPC has implemented various methods and systems to ensure compliance with the Companies Act and this is another step to ensuring this is achieved.

Changes CIPC Introduced to Monitor Compliance     

On 13th August 2019, CIPC issued Notice 52 of 2019 confirming that it is now implementing a new method to monitor compliance with the Companies Act with what they are calling the Compliance Checklist.

What Is This Compliance Checklist?

This Checklist or Questionnaire relates to various sections of the Companies Act, requiring confirmation of compliance of these sections issued by CIPC.

This Checklist will only be applied to your previous calendar year and will be submitted to CIPC when you submit your annual return. Thus, if you submit your 2019 CIPC Annual Return, then your Questionnaire and answers will be based on your previous calendar year i.e. 2018.

Compliance Sections In Question? 

In this Compliance Checklist that CIPC issued, there are certain sections within the Companies Act which CIPC would like confirmation of compliance of. For instance, when you look at Section 4 of the Act, Solvency and Liquidity, have you applied this correctly when it comes to your Company? Do you know when this requirement needs to be complied with? Do you have the correct paperwork in place to confirm that you are compliant? If not, what will it take for you to be compliant with this section? Another section CIPC would like to check for compliance is Section 30Annual Financial Statements. Have you prepared your financials within six months after your financial year-end?

When Does This Come into Effect?

CIPC has rolled out a four-month voluntary submission period 1st September 2019 till 31st December 2019, where Companies will have the option to submit the Checklist and get familiar with the process. As of the 1st January 2020, the submission of the Compliance Checklist will be compulsory and needs to be submitted to CIPC as part of the annual return submission process.

Why Did CIPC Introduce This?       

  • To ensure compliance of the mandatory requirements of the Companies Act described in Section 15 (requiring that every Company must have a MOI);
  • It serves as an educational tool for directors, company secretaries, auditors and audit firms, in guiding them with regards to what their responsibilities are in terms of the Companies Act;
  • CIPC will utilise the Checklist to monitor and regulate proper compliance with the Companies Act and if trends of noncompliance appear, they will act accordingly; and
  • To implement a self-assessment model similar to SARS.

Who Are Required To Submit This Checklist?           

  • Personal Liability Companies (INC)
  • Proprietary Limited Companies (PTY) LTD
  • Limited Companies (LTD)
  • State owned Companies (SOC)
  • Non-Profit Companies (NPC)

What Happens When You Are Not Compliant?         

You simply cannot answer yes, no or not applicable as you deem fit, as this will have an impact on the Company as well as its directors. These answers need to be true and accurate. It is critical that the person completing the questionnaire understands the Act and the requirements of the relevant section of the Act and applies their mind to the answers provided.

As per Section 215(2)(e) a person commits an offence who knowingly provides false information to the CIPC and per Section 216 (b) this person will be liable to either pay a fine or imprisonment for a period not exceeding 12 months, or to both a fine and imprisonment.        

Keep in mind that CIPC recently won the following High Court Cases to impose penalties for non-compliance, providing them more power to enforce penalties on non-compliance of the Act.


What’s Next?     

Speak to RSLV and we will guide you through the Compliance Checklist introduced by CIPC for your business.

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