CIPC to deregister over 800k non-compliant companies

The company watchdog said this was mainly due to continued low compliance with annual returns, beneficial ownership, and other obligations under the Companies Act.

The CIPC said dormant companies pose a risk of being used for money laundering, terror financing, and other criminal activities.

"Directors must comply with the provisions of the Companies Act, even if their companies are dormant," the CIPC said on Monday.

"The high level of inactive business among companies significantly contributes to low compliance levels. Therefore, companies are advised to register the companies only when there is a genuine economic or business opportunity."

The Commission warned directors that if their companies are deregistered, they could be held personally liable for the company's debts.

Subsequently, bank accounts will be frozen, service providers may refuse to deliver services, and creditors may refuse to pay, as the business does not legally exist.

CIPC said only businesses that can provide confirmation of economic activity at the time of final deregistration will be reinstated.

"The reinstatement process is cumbersome, requiring evidence of economic activity along with the relevant form," the statement read.

"Businesses are advised to confirm their business status on www.BizPortal.gov.za. If the current business status is in AR deregistration, businesses must submit all outstanding Annual Returns and Beneficial Ownership Declarations urgently to avoid final deregistration."