Country
Closing a company in South Africa: routes, rules and your records
The CIPC is where you file to close a company in South Africa. The two routes are Deregistration and Voluntary winding-up. The Information Regulator is the data-protection authority for the records. the company has ceased to carry on business and has no assets, or the assets are too small for a liquidation.
The CIPC receives a deregistration request when a company has stopped business and has no assets, or assets too small for a liquidation, and it receives a solvent voluntary winding-up.
| Fact | Detail |
|---|---|
| Registry | The CIPC. Government of South Africa |
| Regulator | The Information Regulator. Department of Justice and Constitutional Development |
| Employee notice | Section 189 of the Labour Relations Act. Department of Employment and Labour |
| Records to keep | Section 24 of the Companies Act. Parliament of the Republic of South Africa |
| Data-protection law | The Protection of Personal Information Act. Department of Justice and Constitutional Development |
How to close a company in South Africa
Deregistration is used when the company has ceased to carry on business and has no assets, or the assets are too small for a liquidation. The Commission must have received a request in the prescribed form and determined that those facts are true. Voluntary winding-up is used when the company is solvent and has adopted a special resolution to be wound up by the company or by its creditors. Before filing, it gives the Master security that debts will be paid within 12 months, or the Master waives security after a director swears there are no debts and an auditor certifies that.
Dissolution and liquidation routes
| Route | When it is used | Source |
|---|---|---|
| Deregistration | the company has ceased to carry on business and has no assets, or the assets are too small for a liquidation. The Commission must have received a request in the prescribed form and determined that those facts are true. | Parliament of the Republic of South Africa |
| Voluntary winding-up | the company is solvent and has adopted a special resolution to be wound up by the company or by its creditors. Before filing, it gives the Master security that debts will be paid within 12 months, or the Master waives security after a director swears there are no debts and an auditor certifies that. | Parliament of the Republic of South Africa |
The registry
The CIPC. A deregistration request is a letter on the original letterhead of the company or of the person asking. It states that the company is not carrying on business and has no assets, or that the assets are too small for a liquidation. It includes a tax clearance or other written confirmation from the revenue service that no tax is outstanding. If the company itself asks, each active director signs, and a certified identity copy of each signatory is attached. Legal personality ends only when the status becomes final deregistered.
Employees: consultation and notice
Section 189 of the Labour Relations Act. When an employer contemplates dismissing one or more employees for operational requirements, it must consult any person a collective agreement names, or else a workplace forum and a registered trade union whose members are likely to be affected, or the employees themselves if there is no such union. The parties seek consensus on avoiding or reducing the dismissals, their timing, how to soften the effect, the selection method, and severance pay. The employer issues a written notice and discloses the reasons, the alternatives it rejected, the numbers and job categories, the timing, and the proposed severance.
For staff who worked in a US state, read final paycheck and WARN rules by state.
Data protection when the company closes
The Protection of Personal Information Act. Personal information is information relating to an identifiable, living, natural person and, where it applies, an identifiable, existing juristic person. The Act gives effect to the constitutional right to privacy by safeguarding personal information when a responsible party processes it, and it establishes an Information Regulator.
The Information Regulator. Section 39 establishes the Information Regulator as a juristic person with jurisdiction throughout the Republic. It is independent, subject only to the Constitution and the law, and must be impartial. It exercises its powers under this Act and the Promotion of Access to Information Act.
The Act defines de-identify as deleting information that identifies the data subject, that can be used or manipulated by a reasonably foreseeable method to identify the data subject, or that can be linked by a reasonably foreseeable method to other information that identifies the data subject.
Records to keep
Section 24 of the Companies Act. Company records that the Act or another public regulation requires are kept in written form, or in a form that can be converted into writing within a reasonable time, for seven years, or longer if another public regulation says so. If the company has existed for less than that period, it keeps the records for the shorter time it has existed. Accounting records are kept for the current financial year and the previous seven completed financial years, and details of a person who served as a director are kept for seven years after that person stops serving.
What this means for a data license
You give the data partner the right to use your records, with personal details removed, for AI research. Personal details are removed before anything leaves your company. Customer and staff details are never shared. You approve each system before anything is shared. To train and test AI that helps people do their jobs. Never for marketing, and never sold as contact lists. You keep ownership of your data, and full use of it in your business. You agree not to license the same records to anyone else. You sign an NDA and the licensing agreement, directly with the data partner, not with Vetrix. The partner is a US-based AI data company. We tell you the data partner's name before you sign. Read what is shared and what is removed, and read the license terms, before you decide.
You need at least 30 staff at peak, or 25 if most of your staff are in the US, and at least 2 years of records.
General information only. This is not legal, tax or financial advice.
The registries already read are listed in how to close a company in another country.
The order of work before the filing is how to wind down a company.
A different registry is how to close a company in the United Kingdom.
If liquidation is the comparison, read Nigeria company liquidation.
Related
- Closing a company by country
Dissolution or liquidation route, registry, employee notice, and data-protection authority by country.
- Winding down
Order of operations to wind down a company, from approval through taxes and dissolution.
- Spain
The commercial registry is the registry. One route is Legal-cause dissolution.
- Sweden
Bolagsverket is the registry. One route is Voluntary liquidation.
- United Kingdom
Companies House is the registry. One route is Voluntary strike-off.
- What's shared
Which records can be licensed, which details never leave, and what you approve.
- Systems
What common business tools do to company data after you cancel, including each vendor deletion window.
Questions about closing a company in South Africa
How do you close a company in South Africa?
You close a company in South Africa through Deregistration or Voluntary winding-up. Deregistration is used when the company has ceased to carry on business and has no assets, or the assets are too small for a liquidation. Voluntary winding-up is used when the company is solvent and has adopted a special resolution to be wound up by the company or by its creditors. The CIPC is the office that takes the filing.
What letter does the CIPC require before it deregisters a company?
Practice Note 7 of 2012 asks for a letter on the original letterhead of the company or of the person making the request. The letter states that the company is not carrying on business and has no assets, or that the assets are too small for a liquidation. It includes a tax clearance or other written confirmation that no tax is outstanding. If the company itself asks, each active director signs, and a certified identity copy of each signatory is attached. Legal personality ends only at final deregistration.
Who must a South African employer consult before an operational dismissal?
Section 189 says that when an employer contemplates dismissing employees for operational requirements, it consults the person a collective agreement names. If there is no such agreement, it consults a workplace forum and a registered trade union whose members are likely to be affected, or the employees themselves if there is no such union. The talks seek consensus on avoiding or reducing the dismissals, their timing, the selection method, and severance pay. The employer starts with a written notice.
What does South Africa's privacy Act mean by de-identify?
The Protection of Personal Information Act defines de-identify as deleting information that identifies the data subject. That includes information that can be used or manipulated by a reasonably foreseeable method to identify the data subject, and information that can be linked by a reasonably foreseeable method to other information that identifies the data subject. Personal information covers an identifiable living natural person and, where it applies, an identifiable existing juristic person. The Information Regulator is the authority the Act establishes.
Sources
- Parliament of the Republic of South Africa. Companies Act 71 of 2008, sections 80 and 82.
- Government of South Africa. Practice Note 7 of 2012, Government Gazette 15 March 2013.
- Department of Justice and Constitutional Development. Protection of Personal Information Act 4 of 2013.
- Department of Employment and Labour. Labour Relations Act 66 of 1995, section 189.