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Charteris & Barnes | Companies and Intellectual Property Commission (CIPC) – Compliance Checklist

By • Gary McLean | Member – CA (SA) | Charteris & Barnes

CIPC recently rolled-out a new e-service for customers to declare their company or companies’ compliance status to specific sections of the Companies Act No. 71 of 2008 (as amended). The roll-out is mandatory from 01 January 2020 and the compliance checklist will need to be completed before the annual returns may be submitted. The checklist will coincide with the date that your annual return is due, which is on the anniversary of the company registration date.

The Commission introduced this compliance checklist to monitor and regulate proper compliance with the Companies Act and if certain trends of non-compliance appear, they will take action accordingly. They also want to ensure compliance of the mandatory requirements of the Companies Act described in Section 15 (requiring that every company must have a MOI) and to implement a self-assessment model similar to SARS. It also serves as an education tool for directors, company secretaries, auditors and audit firms, guiding them with regards to what their responsibilities are in terms of the Companies Act.

Which entities need to fill out this annual compliance checklist?
Proprietary Limited (PTY) LTD
Incorporated Companies (INC) Limited (LTD)
State-Owned Companies (SOC)
Non-Profit Companies (NPC)

On 5 March 2020, the CIPC brought into effect that only entities whose annual financial statements are either independently reviewed, or audited, are required to submit the compliance checklist

The following sections needs to be complied with:

Section 4: solvency and liquidity
Section 15: MOI
Section 26: Access to company records
Section 27: Financial year of company
Section 28: Accounting records
Section 29: Financial statements
Section 30: Annual financial statements
Section 32: Use of company name and registration number
Section 33: Annual return
Section 44: Financial assistance for subscriptions of securities
Section 45: Loans of other financial assistance to directors
Section 50: Securities register and numbering
Section 61: Shareholders meeting
Section 66: Board, directors and prescribed officers
Section 69: Ineligibility and disqualification of persons to be director or prescribed officer
Section 70: Vacancies on board
Section 72: Board committees
Section 86: Mandatory appointment of company secretary
Section 90: Appointment of auditor
Section 92: Rotation of auditor
Section 94: Audit committee
Regulation 21: Registered office of the company
Regulation 43: Social and Ethics Committee
Schedule 1: Provision concerning Non-Profit Companies

It is the responsibility of the directors to ensure compliance and completion. The CIPC has made it clear that they will hold the directors responsible for any fraudulent or incorrect submissions.

What’s next?
We urge all businesses to take note of the mandatory compliance with the Enforcement Compliance Checklist to the CIPC as from 1 January 2020 and to contact your Accounting Firm for any further information and guidance with the compliance checklist as introduced by the CIPC.
For more information, please visit www.cipc.co.za and search for the Enforcement Compliance Checklist.