Annual compliance for a Pty Ltd

A Pty Ltd has filings due to CIPC and SARS every year. If they are missed, CIPC can deregister your company, which can freeze your bank account, void your contracts and put your business assets at risk. This guide lists each annual obligation with its deadline and how it works.

1. The CIPC annual return

Every company must file an annual return with CIPC — the Companies and Intellectual Property Commission. It is separate from your tax return. It is a CIPC filing confirming your company is still active and its details are current, with a fee that scales with your turnover.

It's due within 30 business days of your company's incorporation anniversary — the date it was registered. Your financial year-end does not affect it. Miss it and CIPC assumes the company is dormant and starts deregistration. Filing your SARS tax return does not count as filing the CIPC annual return.

2. Beneficial ownership filing

Every company must file a beneficial ownership declaration with CIPC — identifying the natural persons who ultimately own or control the company, generally those holding 5% or more, plus anyone with effective control. It's filed alongside the annual return and must be kept current whenever ownership changes.

Without an up-to-date beneficial ownership filing, the CIPC system can block you from filing your annual return, which leads towards deregistration. The filing applies to a two-director Pty Ltd in the same way as to a large company.

3. Keep the company registers and records

The Companies Act requires you to keep company records. That means holding and keeping current:

• A register of directors and their details.
• The securities (share) register showing who owns which shares. This is the legal record of ownership, and the directors must keep it.
• The beneficial ownership register, kept in step with the CIPC filing.
• Minutes of directors' and shareholders' meetings and resolutions.
• Your accounting records and annual financial statements (keep records for five years).
• The company's Memorandum of Incorporation (MOI).

If there's ever a dispute between shareholders, a sale of the business, a bank query, a SARS audit or a due-diligence check, these are the documents that prove who owns and runs the company. A buyer's lawyer will ask for the share register at the start of a sale, and a missing register can lower the price or stop the sale.

4. Annual financial statements, audit and review

Every company must prepare annual financial statements. Whether they need external assurance depends on the company's size and public-interest score: larger or more complex companies need an audit, while smaller owner-managed companies may need only an independent review, which is a lighter, cheaper level of assurance. Some very small companies where the owners are the only shareholders may be exempt from both, but every company must prepare financial statements. Check which level applies to you. An audit you don't need is an avoidable cost, and a missing review that you do need is a compliance failure.

5. The ITR14 company tax return

Every company must file an annual income tax return — the ITR14 — with SARS, declaring its income and working out its tax. Standard company tax is 27% of taxable profit, though small businesses that qualify as a Small Business Corporation pay reduced SBC rates that start at 0% on the first slice of profit.

6. Provisional tax during the year

A company pays its tax during the year, because it is automatically a provisional taxpayer. That means two estimates and payments each year, submitted on an IRP6: one at the end of August and one at the end of February, with an optional top-up at the end of September.

Under-estimate too low and SARS can charge a 20% under-estimation penalty, so base the estimates on current figures. Set the money aside monthly so the cash is there for the February payment. Our provisional tax guide covers the estimates in detail.

7. Payroll filings if you have staff

Once you put someone on payroll, monthly filings start. You deduct PAYE and pay it over with UIF and SDL via an EMP201 by the 7th of each month, and reconcile twice a year on an EMP501. The rates and thresholds:

• PAYE — deducted from staff and paid monthly via EMP201 by the 7th.
• UIF — 2% in total (1% employer, 1% employee), on remuneration up to R17,712 per month.
• SDL — 1% of payroll, but only if your total annual payroll exceeds R500,000.

See our payroll page for how this fits together. The EMP201 is due every month, and a late one brings penalties and interest.

8. Directors' duties under the Companies Act

The Companies Act places legal duties on each director personally. You must:

• Act in good faith and in the best interests of the company.
• Act with reasonable care, skill and diligence.
• Avoid conflicts of interest, and disclose any that arise.
• Avoid trading the company recklessly or while it's insolvent.
• Keep the company's records, registers and compliance in order.

Company compliance mistakes to avoid

• Thinking the SARS return covers CIPC. The ITR14 and the CIPC annual return are separate filings to two different bodies.
• Diarising the annual return to the financial year-end. It's due within 30 business days of the incorporation anniversary, which can be a different date.
• Ignoring beneficial ownership. Let it lapse and CIPC can block the annual return, which starts deregistration. It applies to small companies too.
• Never keeping a share register. You need it when you sell, take on an investor or have a dispute with a co-shareholder.
• Paying for a full audit that isn't required. Some small companies need only an independent review, or are exempt. Check which applies.
• Guessing the provisional tax estimate low to ease cashflow. The 20% under-estimation penalty applies to the shortfall.

Worked examples

Company compliance with Buzz

We keep your CIPC and SARS deadlines on a calendar, file each return on time, keep your registers and beneficial ownership current, and check that you have the right level of assurance. See our company services, or book a discovery call.