Statutory Compliance:
Written by: Phyllis de Klerk
What is an Annual Return?
An annual return is a yearly statement (statutory document) lodged at the Companies and Intellectual Property Commission (CIPC) which confirms that the company/close corporation’s details on record are accurate and current.
What is a Beneficial Ownership Declaration?
A Beneficial Owner is a natural person who ultimately owns or exercises control over a legal entity (company or close corporation), whether directly or indirectly.
The Beneficial Ownership (BO) Declaration is a yearly statement (disclosure) filed at the Companies and Intellectual Property Commission (CIPC) which identifies the real individuals (not just legal entities) who ultimately own or control the company. This promotes transparency and prevent misuse of companies/close corporations for money laundering, terrorism financing, or tax evasion.
Why is it relevant?
As part of the amendments introduced by the General Laws (Anti–Money Laundering and Combatting Terrorism Financing) Amendment Act 22 of 2022 (which amended the Companies Act 71 of 2008), companies and close corporations must submit a BO Declaration when they file their Annual Return. In fact, on 1 July 2024, CIPC introduced a “hard-stop” in its electronic filing system making BO Declarations and Annual Returns legally inseparable filings: an Annual Return cannot be lodged unless the BO Declaration is submitted up to date.
CIPC initiated the deregistration process for non-compliant companies/close corporations. The primary reason for deregistrations is failure to submit Annual Returns and BO Declarations to CIPC.
Nexia SAB&T reported that as of 17 January 2025, a “large volume” of companies/close corporations was already being deregistered due to non-compliance. An article in the *Daily Investor stated that 800,000 companies/close corporations were expected to be deregistered due to non-compliance with Annual Return and BO Declaration obligations. (*South Africa kisses 800,000 companies goodbye, Kirsten Minnaar, 23 January 2025.)
Many business owners are often unaware of their legal obligation to file Annual Returns and BO Declarations, and this may be ascribed to:
- Lack of awareness of the deadlines.
- Confusing these filings with SARS tax returns.
- No dedicated compliance officer or company secretary.
- Thinking small or dormant companies/close corporations are exempt. (Even if your business is “small” or “inactive”, non-compliance is visible and carries the same enforcement risks as active entities.)
The consequence of non-compliance may be severe, because a deregistered company/close corporation can no longer trade legally – (bank account closure, ineligibility for future contracting).
To Be…
Submission of Annual Returns and BO Declarations is not a mere regulatory formality — it is a way to strengthen your company/close corporation’s credibility and protect it from possible legal and financial risks as is evident hereunder.
Be proactive and make Grocon Financial Group your trusted partner of choice who recognise, optimise and protect your company/close corporation’s best interests in achieving this goal.
Achieve and maintain compliance:
Submission of Annual Returns and BO Declarations is not a mere regulatory formality — it is a way to strengthen your company/close corporation’s credibility and protect it from possible legal and financial risks as is evident hereunder.
Verify existing details prior to submission and be sure to also update any new details.
CIPC Annual Return fee is based on the company/close corporation’s turnover and is calculated on a
sliding scale as set out below. Penalties apply for late filing.
CIPC Annual Return Fee - Companies (Pty, Inc., Public, External)
| Annual Turnover | Filing Fee (within 30 days) | Late Filing Penalty (after 30 days) | Total Late Fee |
|---|---|---|---|
|
Less than R1 million |
R100 |
+R50 |
R150 |
|
R1 million but less than R10 million |
R450 |
+R150 |
R600 |
|
R10 million but less than R25 million |
R2,000 |
+R500 |
R2,500 |
|
R25 million or more |
R3,000 |
+R1,000 |
R4,500 |
CIPC Annual Return Fee - Companies (Pty, Inc., Public, External)
| Annual Turnover | Filing Fee (within 2 months) | Late Filing Penalty (for each late lodgement) |
|---|---|---|
|
Between R0 and R50 million |
R100 |
+R150 |
|
Between R0 and R50 million |
R4,000 |
+R150 |
Take Note:
Update the BO register within ten business days with any possible change in beneficial
ownership.
Not to be…
Do not risk your company/close corporation’s good reputation and very existence due to non- compliance.
Monitor CIPC communications:
If your company/close corporation is flagged for non-compliance, you may receive SMS/email notices before your company/close corporation is placed in deregistration process. If still not rectified, the company/close corporation will be placed in Final Deregistration.
Do not rely solely on external communications.
Final Deregistration:
If your company/close corporation has been deregistered (final deregistration), the process to reinstate is non-trivial and may involve proving economic activity at time of deregistration and paying outstanding fees and possible penalties.
Restoration:
Restoration of deregistered company/close corporation:
If the deregistration happened within the past three years and you have the company/close corporation’s supporting documents and consent from affected parties, you can file for voluntary restoration.
If more than three years have passed or the assets of the company need to be reclaimed, you must apply to the High Court for restoration via a legal process. Legal representation is strongly advised.
Once the company/close corporation is restored:
- It regains its legal status.
- It can resume business and legal operations.
Important!
Reach out anytime — we are just a call away to resolve any outstanding matters.
Stay in Control of Your Business Future. Do Not Let Compliance Mistakes Hold You Back
Compliance keeps your business active, protected and ready for growth. Annual Returns and Beneficial Ownership Declarations now go hand in hand, CIPC will not accept one without the other. Miss a deadline and you risk deregistration. Stay compliant and keep your business moving forward with confidence.
Grocon Financial Group is a South African based registered Accounting and Financial Services provider.