Small Business Stuff Chat about SMME issues

CIPRO – The Quiet Disaster

As you may have seen in the press, the Companies and Intellectual Property Registration Office “CIPRO” is in turmoil.  The CEO is on long-term sick leave, the CIO is suspended, and there are all sorts of dark rumours around the award of a tender to develop and maintain the ICT infrastructure of CIPRO.

If like me, you operate a cc, there is a legal requirement to submit an annual return, a process that is carried out via the CIPRO website, www.cipro.gov.za.  If you don’t submit a return, then your company will be deregistered.    The problem is that their website has been unusable for at least the last six months .  Even if you are a dedicated return submitter, by now you would have tossed your PC out of the window in frustration trying to use their website.

CIPRO, however, carries on with the slowly grinding wheels of Government procedure.  As far as we know, they currently have 32,000 companies lined up for deregistration because of non-submission of annual returns.   The only way to check to see if you are on the list is to visit their website and verify your company’s status.  If you can actually get onto the website and carry out the enquiry that is.

Why should you be concerned about deregistration ?  It brings a world of trouble in it’s wake.  Firstly SARS.  If your company is deregistered, you lose your tax status, your VAT status, and all the other stuff relating to PAYE, UIF and so-on.  Lots of sitting around in SARS offices while you should be earning money beckons.

Banks.  If you have company assets and used loans to buy them, those loans are now in the name of a non-existent company.  The Bank will become very excited and cause you all sorts of grief demanding immediate repayment of the loan.  If as usual you didn’t bother to read the fine print, you will find that you have underwritten the loan in your personal capacity, so you as an individual are now liable.  If a company asset is offered as surety – more trouble.   Let’s not even go to the status of your company account. You may find you have no access to cash.  Again, lots of sitting around in the bank while you should be earning money.

Company Insurances – the Insurance Company will repudiate any claim, stating that since the company no longer exists, then all policies are null and void. I foresee m’learned friends making shed loads of cash fighting this one in court.  Further, it may affect your lease and loan status, particularly for vehicles, as current insurance cover is usually mandatory.  Again lots of admin work while you should be earning money.

The silence from CIPRO and the business media about the effects of forced deregistration is deafening.  On the one hand, it might be a good thing because no-one will notice the deregistration and the whole gemors can be quietly fixed in the background.  On the other, because there is no popular outcry, nothing may be done for quite some time, and some-one will notice.

Best check up to see if it affects you.