All companies (including external companies) and close corporations are required by law to file their annual returns with the CIPC on an annual basis, within a prescribed time period.
The purpose for the filing of such annual returns is to confirm whether a company or close corporation is still in business/trading, or if it will be in business in the near future. The annual return may be regarded as a type of annual “renewal” of the company or close corporation registration.
Therefore, if annual returns are not filed within the prescribed time period, the assumption is 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 The legal effect of the deregistration process is that the juristic personality is withdrawn and the company or close corporation ceases to exist.
Please note that the information provided does not constitute legal or professional advice, but rather the applicability of existing theory to a given practical situation. Due care is taken to ensure that the information is correct, but it remains subjective and an interpretation of application of information.