About deregistering or liquidating your Close Corporation
Do you want to deregister or liquidate your CC? You may deregister your CC and continue operating in a different form.
Deregistration implies that a business ceases to be registered as a CC but is able to pay its debts. After deregistration, your business can continue in a different form e.g. as a sole proprietor.
Liquidation means that the business ceases to operate (generally as a result of financial problems). Liquidation may come about as a result of a court action by the creditors or it may be voluntary i.e. applied for by members of the CC.
If your business has assets, liabilities or both, then you may have to follow the liquidation route.
There are three triggers for deregistration:
- Request from entity or auditor/AO
- Annual returns non compliance after two successive years of non-compliance
- The Company and Intellectual Property Commission beliefs that the entity has been inactive for seven years.
If deregistration is triggered by (1) or (3), directors, auditor/AO, entity, complete form CoR40.3(Demand letter to inactive company). The entity is also place into deregistration process. The entity or other interested parties then has 20 business days from date of issue of letter to object. If no objection after 20 business days, CoR40.4 (Commission notice of pending deregistration) is issued. At this stage the entity will be referred to the B list for publication of pending deregistration.
Another 20 business days from the date of issue of letter, entity is allowed to object before the entity is referred for final deregistration.
Once placed in final deregistration and published on the website, final notices must go out to the role players and the applicant to inform them of the final deregistration.
If triggered by non compliance with Annual Return (option2): After the expiration of the 20 business days from issuing CoR40.3 and there are no objections received and/or still no compliance with annual returns, a Compliance Notice (CoR40.4) is issued. The entity then has an additional 15 days to comply with the annual returns.
If deregistration is triggered by annual returns the entity must still be allowed to lodge annual returns.