On 1 January 2020, it became compulsory for businesses to submit the CIPC compliance checklist with their annual return. This checklist was created to help the CIPC keep track of how businesses apply the Company Act to their business and if there was non-compliance in certain areas what can the CIPC do to improve this. Here is a short overview of the CIPC compliance checklist.

Who is the compliance checklist for?

The following types of business need to submit a compliance checklist:

  • Personal Liability Companies – Inc.
  • Proprietary Limited Companies – Pty LTD
  • Limited Companies – LTD
  • State-owned Companies – SOC
  • Non-Profit Companies – NPC

Currently, closed corporations don’t need to submit the checklist.

What timeframe is the checklist for?

There is some confusion about the period which the checklist refers to but it is generally accepted that a calendar year refers to 1 January – 31 December of the previous year from when you submit your annual return. Your annual return is submitted on the anniversary of the incorporation of your company.

Here is an example:

If you incorporated your company on 1 July 2018 then you will need to submit your annual return on 1 July 2019. This means the checklist will refer to the period from 1 January 2018 – 31 December 2018.

What are the checklist questions?

Here is a summary of the questions you will be asked. When answering these questions you need to think about the following:

  1. Is it applicable?
  2. Did you apply it correctly?
  3. Do you know the requirements?
  4. Do you have the correct paperwork?
  • Did the company comply with section 4 (solvency and liquidity test) during the previous calendar year?
  • Did the company comply with section 15 (Memorandum of Incorporation, shareholders’ agreement and rules of the company) during the previous calendar year?
  • Did the company comply with section 26 (Access to company records) during the previous calendar year?
  • Did the company comply with section 27 (Financial year of company) during the previous calendar year?
  • Did the company comply with section 28 (Accounting records) during the previous calendar year?
  • Did the company comply with section 29 (Financial statements) during the previous calendar year?
  • Did the company comply with section 30 (Annual financial statements) during the previous calendar year?
  • Did the company comply with section 32 (Use of company name and registration number) during the previous calendar year?
  • Did the company comply with section 33 (Annual return) during the previous calendar year?
  • Did the company comply with section 44 (Financial assistance for subscriptions of securities) during the previous calendar year?
  • Did the company comply with section 45 (Loans of other financial assistance to directors) during the previous calendar year?
  • Did the company comply with section 50 (Securities register and numbering) during the previous calendar year?
  • Did the company comply with section 61 (Shareholders meeting) during the previous calendar year?
  • Did the company comply with section 66 (Board, directors and prescribed officers) during the previous calendar year?
  • Did the company comply with section 69 (Ineligibility and disqualification of persons to be a director or prescribed officer) during the previous calendar year?
  • Did the company comply with section 70 (Vacancies on the board) during the previous calendar year?
  • Did the company comply with section 72 (Board committees) during the previous calendar year?
  • Did the company comply with section 86 (Mandatory appointment of company secretary) during the previous calendar year?
  • Did the company comply with section 90 (Appointment of auditor) during the previous calendar year?
  • Did the company comply with section 92 (Rotation of auditor) during the previous calendar year?
  • Did the company comply with section 94 (Audit committee) during the previous calendar year?
  • Did the company comply with regulation 21 (Registered office of the company) during the previous calendar year?
  • Did the company comply with regulation 43 (Social and Ethics Committee) during the previous calendar year?
  • Did the company comply with schedule 1 (Provisions concerning Non-Profit Companies) during the previous calendar year?

You should be able to answer yes, no or not applicable to each of these questions. If you are unsure, it is best to consult with a professional compliance officer because if you don’t answer accurately and truthfully then you may be liable for a hefty fine or could spend 12 months in jail. You could also use the CIPC Compliance Checklist tool developed by The Supremacy Group to assist you.

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