Deregistering a company can feel like navigating a maze, but it doesn’t have to be overwhelming. If you’re considering closing your business, understanding how to deregister a company on CIPC is essential to avoid costly penalties and maintain compliance. Whether it’s through voluntary deregistration or automatic processes, this guide simplifies the journey for you.
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What Does Deregistration Mean?
Deregistration removes a company from the official register, leaving it with no legal standing. It signifies that the business has ceased operations, holds no assets, and carries no liabilities.
Two primary ways exist to deregister a company with the Companies and Intellectual Property Commission (CIPC):
- Automatic Deregistration: This occurs when a company fails to file its annual returns with the CIPC for two consecutive years. After five years of non-compliance, the company will be officially deregistered.
- Voluntary Deregistration: This requires a formal request to the CIPC and involves several steps, including settling all tax and annual return obligations.
Automatic Deregistration: Proceed with Caution
If you neglect to submit annual returns for two or more consecutive years, the CIPC initiates automatic deregistration. After five years, the company is officially deregistered.
However, this approach has risks:
- The company remains “active” during the process, accruing penalties and late fees from the CIPC and SARS.
- These liabilities may come back to haunt you later, requiring full payment before you can close the company.
Voluntary Deregistration: A Proactive Approach
For a smoother exit, follow these steps to voluntarily deregister your company on CIPC:
Step 1: Get Compliant with CIPC and SARS
Ensure your annual returns and tax returns are up to date before submitting a deregistration request.
Step 2: Collect Supporting Documents
Prepare the following:
- A tax clearance certificate (PIN) or a letter from SARS confirming no tax liabilities.
- Certified copies of directors’ ID documents.
- A deregistration letter on your company letterhead.
Step 3: Draft the Deregistration Letter
Your deregistration letter must include:
- Date.
- CIPC’s address.
- Company name and registration number.
- Tax number.
- A statement confirming the company is dormant, has no assets, and cannot reasonably be liquidated.
Ensure at least 50% of active directors sign the letter.
Step 4: Submit Your Request
Email the deregistration letter and supporting documents to deregistrations@cipc.co.za.
Important Notes to Remember
- Voluntary deregistration can take up to six months. Follow up regularly with the CIPC.
- Your company must be tax-compliant, and all annual returns must be filed.
- Automatic deregistration can lead to unforeseen financial consequences.
Deregistering a company is not just about stopping operations; it’s about closing one chapter responsibly. Knowing how to deregister a company on CIPC ensures you avoid penalties and unnecessary complications, paving the way for a fresh start.
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