Background:

In South Africa’s dynamic corporate landscape, maintaining compliance with statutory obligations is paramount for the continuity and legal standing of companies. One critical aspect of this compliance is the timely filing of Annual Returns (“AR”) with the Companies and Intellectual Property Commission (“CIPC”). AR Deregistration refers to the deregistration of a company due to the non-filing of Annual Returns (ARs) with the CIPC. Failure to adhere to this requirement can lead to AR deregistration, a process that effectively dissolves a company, stripping it of its legal persona and operational capabilities. In accordance with section 33(1) of the Companies Act 71 of 2008 (“Act”), every registered company and close corporation in South Africa is legally obligated to file annual returns with the Companies and Intellectual Property Commission (“CIPC”) for the purpose of confirming their continued operation and ensuring that their statutory information remains current and accurate.

Legal framework:

When a company fails to file its ARs with the CIPC for two or more consecutive years, it risks being deregistered. The result of not filing AR results in the company being removed from the CIPC register, effectively dissolving its legal existence. The process involves issuing a notice of non-compliance, marking the company as “AR Deregistration in Progress” and eventually removing it from the CIPC register if compliance is not restored. Without legal personality, a deregistered company is unable to trade, enter into binding contracts, own assets, or enforce its rights in court. One of the most serious consequences of deregistration is that all assets still registered in the company’s name at the time, such as immovable property, vehicles, bank accounts, or intellectual property are considered ownerless. In terms of common law, the ownership of these assets is transferred to the state, known as res publicae.

For companies that have already been deregistered, reinstatement is possible, but it requires a formal application to the CIPC. The process involves submitting proof of continued business activity, certified identification documents of the directors or members, tax clearance from SARS, and payment of all outstanding returns and penalties. Although reinstatement can restore a company’s legal status, it is often time-consuming and can delay important business decisions.

Concluding remarks:

In light of the increasing emphasis on corporate compliance and the far-reaching implications of AR deregistration, it is clear that annual return filings are not a mere administrative formality they are a legal obligation that underpins a company’s continued existence and credibility.

VDMA’s team of experts are available to assist you and your business with any company and corporate law matters.

Published 28 April 2025