All private limited companies by law have to file annual returns once every year within the required time frame as regulated by the Companies Act.
By filing the annual returns with the Registrar of Companies, the company confirms whether they are still in business or trading, or if it will be in business in the near future. An annual return is a statutory return in terms of the Companies Act and is a summary of the most relevant information pertaining to a company.
The prescribed filing fees for annual returns are legislated, and as such cannot be waived by the Registrar of companies. When a company fails to submit its annual returns for a long time, the Registrar of Companies will assume the company is no longer trading and may start the deregistration of the company.
Once a company has been deregistered, the Registrar of companies removes the company from its active records. Legally, the company will now cease to exist and the company name will become available to the general public for registration.
Once the company is in the deregistration process due to the non-payment of annual returns, it is possible for the deregistration process to be cancelled if all outstanding annual returns are paid up to date.
If however the company is in final deregistration, then the company can apply for reinstatement upon filing of the required documentation. If the application is successful and all reinstatement criteria are met, the Registrar of Companies will change the status of the company to “in reinstatement process”, at a prescribed fee.
To keep your company in good standing with the Registrar of Companies and to avoid any penalties, possible deregistration, or the aggravation of trying to reinstate the company, every company is advised to lodge their annual returns timeously within the stipulated timeframe.
Ways to avoid incurring penalty fees include:
- Being aware of your company’s Annual Return Date
- Ensuring that your company’s financial statements are prepared well (Know your authorised & issued share capital)
- Seeking assistance from a company secretarial firm such as M&J Consultancy so the annual return is taken care of and reminders are sent to the company
To conclude, filing your Annual Returns is of the utmost importance. If you are not sure of the whole process, then get in touch with us for a detailed guide and walkthrough.