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In South Africa, the process of deregistration involves formally dissolving a company, close corporation (CC), or trust with the relevant authorities. This is a legal process that requires compliance with specific regulations and can have significant implications for the stakeholders involved. Make sure you understand all the steps involved before taking on this endeavour.
Deregistration in South Africa is governed by the Companies Act, 2008; the Close Corporations Act, 1984; and the Trust Property Control Act, 1988. These laws outline the procedures and requirements for deregistering a company, CC, or trust. It's essential to familiarise yourself with the specific regulations applicable to your type of entity before proceeding with the deregistration process.
Not all companies, CCs, or trusts are eligible for deregistration in South Africa. Certain conditions must be met before an entity can be deregistered. For example, a company or CC must not have any assets or liabilities, must not be carrying on business, and must not be in debt. A trust must have no assets, liabilities, or trustees. Additionally, all tax obligations, including VAT, PAYE, and income tax, must be up to date before deregistration can be considered.
Once you have determined that your company, CC, or trust is eligible for deregistration, you will need to gather the necessary documentation. This typically includes completing and submitting the relevant deregistration application form, providing proof of compliance with tax obligations, submitting financial statements, and obtaining written consent from all shareholders, members, or beneficiaries, depending on the type of entity.
The completed deregistration application form and supporting documents must be submitted to the Companies and Intellectual Property Commission (CIPC) for companies, the Companies and Intellectual Property Registration Office (CIPRO) for CCs, or the Master of the High Court for trusts. The application will be reviewed for compliance with the relevant regulations, and if approved, the entity will be deregistered.
CIPC will automatically start the deregistration process if a company/CC fails to submit their annual returns for two or more (consecutive) years. See below from their website:
“The CIPC will assume that the company or close corporation is inactive, and as such CIPC will start the deregistration process to remove the company or close corporation from its active records. The legal effect of the deregistration process is that the juristic personality is withdrawn and the company or close corporation ceases to exist.”
Once deregistration has been approved, the company, CC, or trust will be struck off the register and cease to exist as a legal entity. It is important to understand the consequences of deregistration, which may include the loss of legal rights and the inability to engage in certain transactions. For example, a deregistered company or CC cannot trade or enter into contracts, and its assets may be forfeited to the state. Similarly, a deregistered trust may lose its legal capacity to act.
After deregistration, keeping records of the process and retaining any relevant documentation for future reference is vital. It is also essential to notify all stakeholders (including creditors, shareholders, members or beneficiaries) about the deregistration and its implications. This will help ensure that all parties are aware of the change in status and can take appropriate actions as needed.
In conclusion, the deregistration process for companies, CCs, and trusts in South Africa involves compliance with specific regulations and can have significant consequences. Seeking professional advice from a qualified attorney or accountant is highly recommended in this process.
Our dedicated and specialised team at HuysamenWestraad Inc. is qualified to assist you in deregistration matters. Please contact us for a consultation.
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