What Happens If Your Company is Deregistered for Not Filing Annual Returns?
Companies need to file annual returns with CIPC to stay legally active. If you miss this, your company can be deregistered.
What Does Deregistration Mean?
1) The company ceases to exist, so the company is not a legal entity anymore. The directors cannot act on behalf of the company anymore. Should you do continue to operate, the directors can personally be kept liable for these actions.
2) You can’t operate as your company no longer legally exists, so you can’t trade, sign contracts, or do any business under its name.
3) You could lose assets: Upon deregistration, all assets of the company, like bank accounts, vehicles, or property, passes automatically to the state.
4) You still owe taxes: Even if the company is deregistered, SARS will still expect you to pay any outstanding taxes, penalties, or VAT, as the tax types of the company is not deregistered with the CIPC deregistration of the company. That is a separate process.
What Should You Do?
1) Stop Trading: Once deregistered, any business activities you do under the company name are illegal and you can be held personally liable for these actions.
2) To protect your assets, apply for reinstatement of the company as soon as you learn about the deregistration of the company.
3) Get help: Speak to a professional (like an accountant or lawyer) to assist you in your decisions going forward and to assist with the reinstatement of the company.
How to Avoid Deregistration?
File your annual returns on time every year. Use us to help you stay compliant and avoid late fees or penalties.
Keeping your company compliant saves you from unnecessary stress, legal trouble, and financial loss. Need help with your company’s compliance or reinstatement? Contact Business Services today!