Is your Company compliant? New requirement from 01 January 2020!
We are bringing the following very important and high-risk change to your attention:
CIPC has introduced a Compliance Checklist to be completed as part of the Annual Return submission for all Companies (Proprietary Limited, Incorporated, Limited, State-Owned and Non-Profit). CIPC has further advised that they will utilise the Checklist to monitor and regulate compliance of the mandatory requirements of the Companies Act and if trends of non-compliance appear, they will act accordingly.
This process is MANDATORY from 01 JANUARY 2020 and applies to the calendar year immediately preceding the company’s anniversary of the date of incorporation.
Non-compliance may lead to a formal investigation by the CIPC. The outcome of such an investigation may lead to the issuance of a Compliance notice and other actions which may be imposed by other regulators too. Companies that fail to respond to a compliance notification and remain non-compliant for a duration of time, can be issued with an ADMINISTRATIVE FINE for an amount not exceeding the greater of:
- 10% of turnover for the period during which the Company failed to comply with the compliance notice; and
- The Minister may make a regulation prescribing the maximum amount of an administrative fine, which amount must not be less than R1 000 000 (one million Rand).
Some aspects of the Companies Act which are covered in the Compliance Checklist are Solvency and Liquidity, Annual Financial Statements to be signed within 6 months of year-end and Memorandum of Incorporation (MOI), Shareholder Agreements and Rules to be consistent with the Act.
The full Compliance Checklist questionnaire is as follows:
The relevant Sections of the Companies Act can be viewed here.
Please contact us to assist you with the understanding of the sections of the Act before completing any communications you may receive as the above is complex and can create personal liability if not completed correctly. We are also able to provide training assistance to your staff.
All material subject to our Legal Disclaimers.