The Companies and Intellectual Property Commission (CIPC) has announced that the temporary relaxation measures granted to companies during the national lockdown will lapse on 1 December 2020. The CIPC will not be extending these measures until after the end of the national lockdown as originally advised in its earlier notices. Consequently, from 1 December 2020, all companies and close corporations must strictly adhere to the following provisions of the Companies Act, 208 (Act) within the prescribed timeframes:
- deadlines for regulatory filings: the CIPC revoked its extension of the deadlines to file annual returns, annual financial statements, financial accountability supplements and compliance checklists. Companies can no longer rely on limitations posed by Covid-19 to delay their filings. The CIPC will enforce penalties for late filings from 1 December 2020;
- compliance notice for reckless trading: at the start of the national lockdown in March 2020, the CIPC temporarily suspended the exercise of its powers to issue compliance notices under section 22 of the Act in relation to companies which were temporarily insolvent and still carrying on business or trading due to business conditions which were caused by the Covid-19 pandemic. The CIPC's powers to issue compliance notices to companies requiring them to cease carrying on their business or trading will resume from 1 December 2020, regardless of the cause of insolvency; and
- commencement of business rescue proceedings: the extension granted by the CIPC in April 2020 for voluntary business rescue proceedings which commenced but did not complete the procedure in terms of section 129 of the Act will expire on 1 December 2020. Accordingly, companies that started business rescue proceedings during the lockdown period but have not yet appointed a business rescue practitioner (BRP), will no longer benefit from the automatic five-day extension for the appointment of the BRP in terms of section 129(3) of the Act.
As of 1 December 2020, it is back to normal business for the CIPC and companies are well-advised to make sure they are on track with their regulatory compliance obligations. The CIPC has confirmed that it will consider if any non-compliance can be attributed to the constraints and limitations posed by Covid-19 on a case by case basis. Please touch base with us if you require any assistance in ensuring compliance or in engaging with the CIPC related to non-compliance.
