Company Records

The Companies Act requires all companies to maintain their company records. A company must at all times have a copy of its Memorandum of Incorporation (MOI) and any amendments or alterations to it, as well as any rules that apply to the company in terms of its MOI. The company is also required to keep a register of its shares and its company secretary and auditor, to the extent that the company is required to make such appointments. In addition, the company is required to keep the following records for a period of seven (7) years:

  • A record of its directors, including the following detailed information about each director:
    • The full name and any former names,
    • the identity number or date of birth,
    • the nationality and passport,
    • the occupation, 
    • the date of their most recent election or appointment;
    • the name and registration number of any other company or foreign company that the director is a director of;
    • the address for service for that director; and
    • any professional qualifications and experience of the director in the case of a company required to have an audit committee.
  • Copies of
    • All reports presented at an annual general meeting;
    • Annual financial statements required by the Act;
    • Any accounting records required by the Act;
  • Notices and minutes of all shareholder meetings, any resolutions taken at those meetings, as well as the documents made available to the shareholders in relation to those resolutions;
  • Copies of any written communication sent by the company to shareholders;
  • Minutes of meetings and resolutions of directors, directors committees, or audit committees.


Any person who holds shares or a beneficial interest in the company is entitled to view and obtain copies of such documents. Any other person may inspect such records at a cost.

Accounting Records

The Companies Act, 2008 requires all companies to keep accurate and complete accounting records, which must be kept and be accessible at the company’s registered office.

Annual Returns

 cipc_infographic.gifAll companies (including external companies) and close corporations are required by law to lodge their annual returns with CIPC within a certain period of time every year. An annual return is a statutory return in terms of the Companies and Close Corporations Acts and therefore MUST be complied with.
Failure to do so will result in the Commission assuming that the company and/or close corporation is not doing business or is not intending on doing business in the near future. Non-compliance with annual returns may lead to deregistration, which has the effect that the juristic personality is withdrawn and the company or close corporation ceases to exist.

  • Companies have 30 business days from the date that the entity become due to lodge annual returns before it is in non-compliance with the Companies Act.
  • Annual returns can only be filed electronically.  
  • Always use your customer code to transact with CIPC.

To calculate outstanding AR fees, click here.   First log in using your customer code and password, and then click on AR calculator.

 

Steps to file Annual Returns

Annual returns must either be lodged electronically on CIPC's website or on a CIPC Self-Service Terminal (SST).  The process of lodging an annual return at a SST is simpler than the online process, as it allows for payments after completion of the transaction.  However, the SST process is only suitable for companies and close corporations where the director or member lodges the annual return him/herself. 

To lodge your annual return online on CIPC’s website, follow these steps:

Step 1:  Register as a Customer

  • If you are already registered as a customer, and know your customer code and password, proceed to step 2.

Step 2: Calculate your annual return fee

  •  Calculate the outstanding Annual Return fee by using the Annual Return Calculator.  First log in using your customer code and password, and then click on AR calculator.
    • Visit the annual return website: http://annualreturns.cipc.co.za;
    • Select "Customer Login" and follow the indicated prompts;
    • Select "AR Fee Calculator";
    • Type in the registration number (year/sequence/type) at the Enterprise Number field and click Validate.  Confirm whether the provided registration number corresponds with the enterprise detail being displayed.  If not, reconfirm registration number by typing it in at the Enterprise Number field and click Validate.  If correct, click Continue.
    • A screen will be displayed indicating lodged annual returns as well as outstanding annual returns.  Type in the relevant turnovers for each outstanding year and click on "Calculate Outstanding Amount";
    • The screen will display the total amount due. 

Step 3:  Deposit funds

  • Deposit the correct amount into the CIPC bank account.  For the bank account details, click here.  Use your customer code as reference when depositing funds into the CIPC account.

Step 4:  File annual return and generate certificate

  • Visit the annual return website: http://annualreturns.cipc.co.za;
  • Select "Customer Login" and follow the indicated prompts;
  • Select "File/Lodge AR";
  • Type in the registration number (year/sequence/type) at the Enterprise Number field and click Validate.  Confirm whether the provided registration number corresponds with the enterprise detail being displayed.  If not, reconfirm registration number by typing it in at the Enterprise Number field and click Validate.  If correct, click Continue.
  • A screen will be displayed indicating lodged annual returns as well as outstanding annual returns.  Type in the relevant turnovers for each outstanding year and click on "Calculate Outstanding Amount";
  • The screen will display the total amount due.  Click on "Pay";
  • The screen will summarise the transaction detail.  Click on "Update Details to Pay";
  • The annual return is pre-populated except for the empty fields under the Enterprise Details heading.
  • Select [+] Expand to open details of each section of the annual return and confirm if information is correct.
  • If the information displayed has changed, tick the appropriate tick box at the relevant heading.
  • Then click on File Annual Return(s).
  • Public Companies must submit their audited financial statements via financialstatements@cipc.co.za.
  • Please include the CIPC reference number provided when lodging the annual returns in the email when submitting the financial statements to CIPC.
  • Click on Generate Certificate for the annual return lodgement confirmation to be generated and keep this copy.
  • For further assistance, kindly contact annualreturns@cipc.co.za.


Useful Links

Financial Statements

All public and state-owned companies must file a copy of the latest approved Audited  Financial Statements on the date that the annual returns are filed with the CIPC. Financial statements must comply with the  published Financial Reporting Standards.

Steps to file your annual financial statements

  • For filing audited financial statements, please click here, complete the required fields and attach a pdf copy of your audited financial statements.
Appointment of an Auditor and a Company Secretary and Rotation of Auditors

It is mandatory for a public and a state-owned company to appoint an auditor and a company secretary.  A public company must appoint its auditors and its company secretary upon incorporation or within 40 business days of incorporation.

The company secretary may be appointed by the incorporators upon incorporation or subsequently by the directors of the company or through an ordinary resolution of the shareholders. The appointed company secretary must be a permanent resident in South Africa. The company secretary does not have to be a natural person, but could also be a juristic person or a partnership, provided that the entities meet the requirements of the Companies Act, 2008.

 Only registered auditors may be appointed. In addition, the appointed auditor may not be a

  • director, prescribed officer, employee or consultant of the company;
  • director, officer or employee of the person appointed as company secretary;
  • person who habitually or regularly performs the duties of accountant or bookkeeper of the company;
  • person appointed in the immediately preceding 5 years as the auditor of the company.

Auditors must be appointed upon incorporated by the incorporators or subsequently by the  directors of the company within stipulated timeframes. The first auditors of a company hold office until the first Annual General Meeting (AGM), and are re-appointed on an annual basis at every AGM. 

In terms of section 92 of the Companies Act, 2008, the same individual may not serve as the auditor or designated auditor of a company for more than 5 consecutive financial years. If an individual has served as the auditor or designated auditor of a company for 2 or more consecutive financial years, and then ceases to be the auditor or designated auditor, the individual may not be appointed again as the auditor or designated auditor of that company until after the expiry of at least two further financial years.

If a company has appointed 2 or more persons as joint auditors, the company must manage the rotation in such a manner that all of the joint auditors do not relinquish office in the same year.

 

Rotation of auditors

In terms of section 92 of the Companies Act, 2008, the same individual may not serve as the auditor or designated auditor of a company for more than 5 consecutive financial years.

If an individual has served as the auditor or designated auditor of a company for 2 or more consecutive financial years, and then ceases to be the auditor or designated auditor, the individual may not be appointed again as the auditor or designated auditor of that company until after the expiry of at least two further financial years.

If a company has appointed 2 or more persons as joint auditors, the company must manage the rotation required by this section in such a manner that all of the joint auditors do not relinquish office in the same year.

Appointment of Audit Committee

A public or state-owned company must have an audit committee consisting of at least three members, unless it is a subsidiary of another company with an audit committee that will perform the functions of the audit committee of the subsidiary. The audit committee members must be appointed upon incorporation by the incorporators or within 40 business days after incorporation by the board of directors. Thereafter, the audit committee must be elected at each annual general meeting.

Audit committee members must be directors of the company, meeting the requirements set out in regulations published by the Minister.  The audit committee members must be non-executive and independent. Audit committee vacancies must be filled within 40 business days.

The audit committee of a company is responsible for the following:

  • Nominating independent auditors for the company;
  • Determining the fees to be paid to the auditors and their terms of engagement;
    Ensuring compliance with the Companies Act and other relevant legislation in the appointment of auditors;
  • Determining the nature and extent of non-audit services that the auditor may provide to the company;
  • Preparing a report for inclusion in the financial statements
    • describing how the audit committee carried out its functions,
    • commenting on the financial statements, accounting practices and internal financial controls of the company
    • stating whether the audit committee is satisfied by the independence of the auditor
  • Receiving and disposing of concerns and complaints relating to
    • Accounting practices and internal audit of the company;
    • The content and auditing of the company’s financial statements
    • The internal financial controls of the company;
    • Any related matter;
  • Making submissions to the board on any matter concerning the company’s accounting policies, financial control, records and reporting.
  • Performing other functions determined by the board, including the development and implementation of a policy and plan for a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control and governance processes within the company.

 

Appointment of Social and Ethics Committee

State-owned companies, listed public companies and private companies with the Public Interest Score (PIS) above 500 are required to have a Social and Ethics Committee.  Companies may apply for exemption from having a Social and Ethics Committee to the Companies Tribunal. Subsidiaries of companies that have a Social and Ethics Committee are not required to have a committee.

 Social and Ethics Committees are responsible to monitor a company’s activities with regard to its contribution to 

  • Social and economic development;
  • Good corporate citizenship;
  • Environment, health and public safety;
  • Consumer relationships; and?
  • Labour and employment.
Annual General Meetings

Public companies are required to hold annual general meetings (AGMs). The first such meeting must take place within 18 months of the incorporation of the company and thereafter the meetings must be held no more than 15 months after the previous meeting (or another period as determined upon application by the Companies Tribunal). 


Annual General meetings must be held to provide at minimum for the following:

  • The presentation of the directors and audit committee reports
  • The presentation of the audited financial statements for the immediately preceding financial year;
  • The election of directors, as required by law and the MOI;
  • The appointment of the auditors and the audit committee;
  • Any matters raised by shareholders, regardless of whether advance notice of the topic was given

The company must deliver a notice of the meeting to each shareholder at least 15 business days prior to the meeting. All shareholder meetings of public companies may be held in South Africa or in another country, but must be accessible for electronic participation by all shareholders, irrespective of the location of the meeting.

Public offering of company securities (Prospectus)

Lodging of a prospectus

A Public company by its nature is allowed to offer its shares/securities to the public for sale.

A Public company before it can offer its shares/securities to the public must register a prospectus which complies with the Companies Act, by getting approval for that prospectus with the relevant exchange for example the Johannesburg Securities Exchange(JSE) if it intends listing, or by the filing of that prospectus with the CIPC. The intention of a prospectus is to provide a potential investor with adequate information to empower the investor to make an informed investment decision.

A prospectus is a document drafted by the company which sets out the details of the investment offering of shares/securities for sale to the public. 

It is important to note that the registration of a prospectus by the Companies and Intellectual Property Commission does not indicate any support or qualify the potential investment as a good investment opportunity. Registration merely indicates the compliance of the prospectus to the minimum requirements set out in the Companies Act 71 of 2008 and Regulations as amended.

A prospectus contains factual information of the company that a prospective investor or subscriber of shares/securities in the company will need to make an informed investment decision, for example, but not limited to:-

1.Assets and liabilities
2.Financial position
3.Profits and losses
4.Cash flow
5.Prospects of the company in which a right or interest is to be acquired
6.The shares/securities being offered and the rights attached to them. (The securities include but is not limited to depository receipt in public companies, notes, derivative instruments, bonds, debentures, participatory interests in collective investment schemes and instruments based on an index.)

 (See section 100 of the Act)

The prospectus is deemed to be registered by the Commission after it was vetted by the Prospectus Vetting Committee and a Certificate to that effect was issued. The Certificate will be issued for a specific period.

Steps to file a prospectus

Step 1:  Register as a Customer

  • If you are already registered as a customer, and know your customer code and password, proceed to step 2.

 Step 2:  Deposit funds

  • The registration of a prospectus is done in two phases. In phase one a draft prospectus will be registered at a cost of R2000.00.  In phase two the final prospectus will be registered when it complies with relevant legislation at a cost of R 5000.00.  For the bank account details, click here.

Step 3: Scan and e-mail  

 Print and complete form CoR 46.4

 

Solvency and reckless trading

The Companies Act, 2008, states that a company must not carry on its business recklessly, with gross negligence, with intent to defraud or trade under insolvent circumstances. (Sect 22) If a company trades in such circumstances, the Commission may require the company to cease carrying on business.

Although “trading under insolvent circumstances” is not defined in the Act, it is accepted to mean that a company does not meet the “solvency and liquidity test” criteria. There are many trading companies which are liquid, meaning they can pay  their debts as they become due, but not necessarily solvent as defined in the solvency and liquidity test.

In terms of the “solvency and liquidity test”, solvency relates to the assets of the company, fairly valued, being equal or exceeding the liabilities of the company. Liquidity relates to the company being able to pay its debt as they become due in the ordinary course of business for a period of 12 months. In terms of the Companies Act, 2008,

The solvency and liquidity test applies to the following:

  • financial assistance for the subscription of securities (sect 44)
  • loans or other financial assistance to directors (sect 45)
  • distributions to shareholders authorized by the board (sect 46)
  • capitalization of shares (sect 47)
  • company or subsidiary acquiring company’s shares (buy backs or buy ins) (sect 48)
  • amalgamations or mergers (sect 113)
Obligation to notify the CIPC of certain changes

A company must notify the CIPC of certain information:

  • A change in the registered address;
  • A change in the location of the company records;
  • A change in the financial year end of the company;
  • Appointment, resignation and removal of a director
  • Commencement of Business Rescue;
  • Resolution to wind up a company