What is a dormant company
A dormant company is classified as a company that has not actively traded for the full year of assessment.
Because there is no activity in the company, it’s easy to forget about it completely along with all red tape that goes with it.
Penalties
SARS have recently become a lot stricter about levying administrative penalties for non-submission and late submission of company tax returns (even if the company is dormant) and these penalties will continue to re-occur on a monthly basis until the submission of the tax returns.
So, if you’re director of a company or the public officer of a dormant company, you still have a duty to submit the company’s tax returns to SARS.
- Check with the Companies and Intellectual Property Commission (CIPC) to see which companies are registered on your name and identity number.
- You can also see here if the company is dormant or still active according to their records.
- Check on SARS eFiling to see if there are any outstanding tax returns for this company.
- Submit all outstanding tax returns to SARS and request the Tax Compliance Status.
De-register a company
When a company de-registers with the Companies and Intellectual Property Commission (CIPC), it implies the company is no longer registered and has no legal standing since it’s not doing any business nor has any assets or liabilities.
When a company de-registers with SARS, it will have no further tax obligations.
If you don’t intend to trade through your company, it would be advisable to de-register with both CIPC and SARS as soon as possible to avoid further administrative penalties.
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