Changes to the implementation of the CIPC Mandatory compliance checklist

Changes to the implementation of the CIPC Mandatory compliance checklist
13 Apr 2020

The Companies and Intellectual Property Commission (“CIPC”) issued a further notice on 5 March 2020 (“Amendment Notice”) regarding the changes to the compulsory company compliance checklist (“Checklist”) which became effective on 1 January 2020. One of the significant changes introduced by the Checklist, as pointed out in our e-brief of 21 February 2020, is that as of 1 January 2020 the CIPC requires that all companies must complete the Checklist prior to submitting its annual returns. Affected companies include private, non-profit, personal liability, public and state-owned companies with the exclusion of close corporations.

The Amendment Notice creates an exception to the submission of the Checklist as it provides that it is mandatory for the affected companies to confirm if the company’s annual financial statements are audited or independently reviewed. The Checklist is now only compulsory to companies who have answered this question in the affirmative.

On the plain reading of the Amendment Notice, any company which falls under the category of above-mentioned affected companies (regardless of its annual turnover) which has had its annual financial statements audited or independently reviewed, either from being required to do so in terms of the Companies Act No. 71 of 2008 (the “Act”) or by its election in terms of its Memorandum of Incorporation or by any other agreement binding on the company has to complete the Checklist.

Another notable change brought about by the Amendment Notice is that companies can now file their annual return and the Checklist separately. The Amendment Notice provides that the Checklist is a standalone service and the information required must therefore be submitted by a company to the CIPC within 30 business days after the anniversary of the company’s date of incorporation. This is in accordance with the amendment made to the reference “compliance year” in the Checklist which is now aligned to the anniversary date of a company’s incorporation. Therefore, the deadline for a company to submit the Checklist is the last date in which that company has to file its annual return with the CIPC, being 30 business days after the anniversary of the company’s date of incorporation.

An improvement brought about by the Amendment Notice is that the Checklist now has an additional feature, being a comment section for each question should companies wish to explain their specific answers given to the CIPC. This will be of great assistance to companies when considering each question of the Checklist to determine whether or not a company has complied with a specific section, regulation or schedule of the Act.

We will keep you updated on further developments, but please feel free to contact our offices should you require any further clarification or assistance with completing your company’s Checklist or annual return.

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(This article is provided for informational purposes only and not for the purpose of providing legal advice. For more information on the topic, please contact the author/s or the relevant provider.)
Andrew Davidson
Andrew Davidson

Andrew Davidson is a senior associate in the commercial department of Eversheds Sutherland, specialising in private equity transactional work, including leveraged transactions, structuring of management arrangements, refinancing, restructurings and disposal...

Lara Jansen van Rensburg
Lara Jansen van Rensburg

Lara Jansen van Rensburg is an associate at Eversheds Sutherland (KZN) in the commercial department, advising primarily on commercial transactions. She holds an LLB degree and an LLM (Business Law)...

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