The Companies and Intellectual Property Commission (“CIPC”) recently provided updated criteria for the reinstatement process for Companies and Close Corporations that were deregistered due to non-compliance with annual returns and beneficial ownership declarations. 

Due to the high volume of reinstatement applications received by the Commission, the Commission decided to simplify the process by requiring less documentation from the client and allocating more manpower for the timely processing of these applications from their side.

The requirements now for a reinstatement application consist of the following:

• COR40.5 application form
• Power of Attorney / Mandate
• Certified ID copies of directors

It is emphasised that proof of economic value must still be obtained and be readily available, as the Commission has the right to request such proof at any given time. It is, however, not a requirement to include such proof with the application.

Economic value is determined by these 3 criteria:

• The company or close corporation was in business at the time of final deregistration, and proof by means of bank statements, invoicing and/or creditors can be provided for a period of 6 (six) months prior to the final deregistration date, and 6 (six) months after the final deregistration date.
• Proof can be provided of immovable property owned by or registered in the name of the company or close corporation.
• A court order was issued for the reinstatement of the company or close corporation.

It should be noted that not all companies and close corporations may be eligible to apply for the reinstatement process.  Only companies and close corporations with economic value will be eligible to apply. 

Once a reinstatement application is submitted and approved by the Commission, the reinstatement of the company or close corporation is only finalised once all outstanding annual returns, beneficial ownership declarations and financial accountability supplement (FAS) / annual financial statements (AFS) have been filed. Kindly note that these submissions must be done within a specific timeframe, as indicated by the approval notice COR40.5 from CIPC.

Should the annual returns, beneficial ownership and FAS/AFS not be filed within the timeframe provided by the Commission, the reinstatement application becomes void, and the requirement to start the process again is to submit a new reinstatement application.

Once the required submissions have been made, the company or close corporation will be successfully reinstated and back to an “in business” status so that it can continue doing business as usual.

Make sure your entity stays compliant and avoid these unnecessary and costly administrative hazards of non-compliance.

For any further information or assistance with your company or close corporation’s compliance, feel free to contact your appointed accounting officer or auditor.