If your organisation is a NonProfit Company (NPC) - formerly known as a Section 21 company, you need to check whether you or your auditors have been making and are up-to-date with ‘annual returns’ to Companies and Intellectual Property Commission (CIPC).
According to the annual report recently tabled by CIPC they were planning a ‘bulk de-registration’ of non-compliant entities in the ‘foreseeable future’.
There is a notice on the CIPC website that the annual return system would be down from 7h00 - 9h00 am on 1 October 2013, for re-activation of late filing and penalty fees for company and close corporation annual returns. So, by the time you read this, it may already be too late.
The effect of de-registration will be that your organisation will no longer have legal status as a registered NPC, and your members / directors may be personally liable for the debts and obligations of the organisation.
Prior to the implementation of the new Companies Act, Section 21 companies were exempted from the requirement to file annual returns with CIPC. Under the new Act, however, this obligation now falls on NPCs as well as private companies (Pty Ltds).
You may find that your auditors, who will be used to filing these returns for all of their Ptys, will automatically have taken on the role of doing so for their NPC clients. It is worth making the call to them to check.
Please note that, although the process is referred to by CIPC as making an ‘annual return’, it is more like paying an annual fee to CIPC to remain registered. The CIPC system will, when you make the return, prompt you to input updated details on the NPC, but the crux of the exercise is paying the fee.
You therefore cannot complete the exercise yourself, unless you are registered as a CIPC customer and have money in your CIPC account.
The following is extracted from the CIPC website, and shows how to calculate your annual return amount:
Annual return fees
|Annual Turnover||Filing within 30 business days after anniversary||Filing more than 30 business days after anniversary|
|Less than R1 million||R100||R150|
|R1 million but less than R10 million||R450||R600|
|R10 million but less than R25 million||R2 000||R2 500|
|R25 million or more||R3 000||R4 000|
The other interesting feature of the annual return is that it is due, not at the end of your financial year, but within 30 days of each anniversary of your NPCs incorporation date. If you look at your certificate of incorporation (for previous section 21s) or your Form COR14.3-Registration Certificate (for recently incorporated NPCs), it will record either date of incorporation or issue date.
Therefore, for example, if your NPC / Section 21 was registered on 28 August of any given year, your annual return should be paid, especially if you want the early payment discount, by 28 September each year.
Of course, your turnover will not be calculated with reference to your anniversary date but your financial year-end. What one simply does, is use the turnover figure for your last completed financial year, whenever that may be.
- Nicole Copley (BA LLB LLM-tax) is non-practising attorney at NS Copley Consultancy.