Pharsyde is doing a series of blog posts designed specifically to raise awareness with regards to statutory submissions. Business ownership overs a wide-range and long list of responsibilities and it is not uncommon for a small business owner to be unaware of the extent of his legal requirements. These posts cover the common statutory submissions: what they are, why they exist and when they are due. If you need more detail about a specific submission or help in getting it right, please give us a shout – we would be happy to go through them in detail with you.
The CIPC is the Companies and Intellectual Property Commission, their functions include:
- The registration of companies, co-operatives and intellectual property rights
- Maintenance of companies, co-operatives and intellectual property rights
- Disclosure of information to the public with regard to its business registers
- Promotion of education and awareness of company and intellectual property law
- Promotion of compliance with relevant legislation and its enforcement
- Monitoring compliance with and the contraventions of financial reporting standards
- Licencing of business rescue practitioners
You do not have to register a business in order to run a business. There is nothing stopping you from trading in your name as a Sole Proprietor for as long as you like. This post is not about the pros and cons of business registration – it deals with an annual requirement that becomes important if you do register: the CIPC annual return.
If you register a business, then every year in the anniversary month of registration, you are required to submit an annual return of earnings to the Commission. The purpose of the return is for the CIPC to confirm that the company is still in business and trading.
If the return is not filed, then the commission assumes that the business is dormant and will begin the process of removing the business from the companies register.
Depending on your company size and type, you may also be required to submit full financial reports with this return. For most small businesses, you only need to submit your turnover for the year and answer a few questions regarding how your financial statements are compiled. You will be charged a fee with the submission, the amount due to the CIPC is dependent on your company turnover and it ranges from R100 (turnover of less than R1million) to R3,000 (turnover of R25 million or more). You must submit your annual return within 30 days of your anniversary date, or the CIPC will also add a late penalty. The full table of fees can be found on the CIPC website, here.
What does this mean for you as a business owner?
Make a note in your calendar of the month in which you registered the business and set a recurring reminder to submit your CIPC return. If you registered in an April, then set a recurring reminder for the 25th of April every year. If you registered your business in September, set a recurring reminder for the 25th of September. Remember, the due date for your CIPC return is the anniversary of your business registration, it is not linked to your financial year-end. If you registered in the month of September but set your business year-end to April, your CIPC annual return is still due in the month of September.
Before you login to the CIPC website, make sure you have the following information on hand: Your total turnover for the previous financial year, the name and ID number (or business registration number) of the person who handles your company bookkeeping and the person who handles your financial record keeping. It does not matter if these roles are handled by one person, you can just fill in their ID number twice. It is also ok if you are the person who handles this role for your own company – then you just fill in your own ID twice.
Make sure that you are able to pay at the time of submission. You either need to make a deposit into the CIPC bank account three working days before you submit, or you can pay by credit card at the time of submission. Not being able to pay at the time of submission will result in the entire submission being cancelled and you will have to start again at the beginning once you have the payment ready.
It would not be a bad idea to read through the CIPC’s How To guide before beginning, you can find it here.
Find this confusing? Give us a shout to go through it in detail!