Emails from intermediaries have been doing the rounds advising business owners that they will be deregistered or liable for extra fees if they do not file their annual returns with the Companies and Intellectual Property Commission (CIPC).
According to Karin Coode, CIPC spokesperson, these emails should not be completely ignored even though it is possibly being sent by intermediaries who see an opportunity to make money by offering business owners the chance to use their services.
She says business owners should check by going to the CIPC’s website, which has recently undergone a major upgrade, whether or not they are non-compliant.
“Business owners only need to remember their password and customer code to log on and check whether their businesses have been, or is in danger of, being deregistered,” says Coode.
She says business owners who do not have the time and do not mind paying the extra fees might choose to use an intermediary.
Coode says the public is largely unaware that intermediaries are responsible for about 70% of CIPC transactions relating to companies and close corporations and that “these fees are and remain much higher than the fees charged by the CIPC for the service.”
The CIPC is acutely aware of the fact that its previous manual processes have been such that public entities prefer to use intermediaries who often charge much higher service fee.
As a result, in 2013 the CPIC has been hard at work modernising its operations to eliminate long queues and high error rates. Since the upgrade anyone can register a company online for R125, with a one-day turnaround time.
“The CIPC business plan focuses on reducing the total cost of transacting with the CIPC. This will be accomplished by systematically migrating to electronic transacting, which will reduce transaction times,” says Astrid Ludin, CIPC commissioner.
Coode says the turnaround time on electronic transactions was already much shorter than for manual transactions – one day for a company registration as opposed to 20 working days for a manual transaction.
In addition, the CIPC had started to collaborate with FNB and other banks and business owners were already able to open a corporate bank account and register their companies through a new FNB online functionality at no additional charge than the CIPC prescribed fees. The aim of these initiatives is to reduce both the actual cost and the time taken to complete a transaction with the CIPC.
By lodging annual returns companies and close corporations ensure that the CIPC is in possession of the latest information.
Non-compliance with annual returns may lead to deregistration, which has the effect that the entity is withdrawn and the company or close corporation ceases to exist.
Filing later than the 30 business day period results in additional fees being charged.
A company or close corporation may be referred for deregistration in the following circumstances:
- Upon application by the company/close corporation itself.
- If annual returns are outstanding for more than two successive years, in which case the company or close corporation will be automatically referred by the system and then notified.
- If the Commission believes that the company or close corporation has been inactive for seven years or more.
Once a company or close corporation has been deregistered, it may apply for restoration whereafter all outstanding information must be lodged.
This year, the CIPC has sought to deregister 345 000 non-compliant entities, as its move to effectively implement online transactions has become paramount and these entities are clogging up its database.
The CIPC was currently sending out reminders via e-mail and SMS to file annual returns.