On the 13th August 2019, the Companies and Intellectual Property Commissioner (“CIPC”) issued Notice 52 of 2019 announcing the introduction of a new requirement for companies to declare its compliance status in the form of a Compliance Checklist.
The Compliance Checklist requires that companies confirm their compliance with specific sections of the Companies Act, No.71 of 2008, as amended, (“the Companies Act”). The CIPC indicated that as from 1 January 2020, all companies would be required to file their Compliance Checklist prior to the submission of their CIPC annual return.
Why the Compliance Checklist?
The CIPC have indicated that the reason for the checklist is:
- To ensure compliance of the mandatory requirements of the Companies Act such as described in section 15, which requires every company to have a Memorandum of Incorporation (“MOI”).
- To serves as an educational tool for directors and company secretaries, in guiding them with regards to their responsibilities in terms of the Companies Act.
- To utilise the Compliance Checklist to monitor and regulate proper compliance with the Companies Act and if trends of non-compliance appear, to act accordingly.
Who must comply with the Compliance Checklist?
The following companies, except close corporations must comply:
- Proprietary Limited
- State owned company
- Non Profit Company
What type of questions will be required to be completed?
The Compliance Checklist comprises of 24 questions on specific sections of the Companies Act and Companies Regulations with ‘yes’, ‘no’ or ‘not applicable’ answering options.
What happens if you do not answer complete the Compliance Checklist?
Failure to complete the Compliance Checklist includes penalties and the possibility of up to twelve months imprisonment.
How do you rectify incorrect information submitted?
In the event of incorrect information being submitted, the CIPC must be notified thereof along with an explanation as to reasoning behind the misstatement and why it should be rectified after which the CIPC will make a determination thereon.
Please do not hesitate to contact either of our offices in Cape Town, Durban or Johannesburg should you require assistance with the lodging of the CIPC Compliance Checklist.
Chris Wilson – Managing Director
Direct number: +27 21 417 8734