Company Deregistration with CIPC: What You Need to Know

By MMT Financial Services

Closing a company isn’t as simple as locking the door and walking away. In South Africa, deregistering a company with the Companies and Intellectual Property Commission (CIPC) is a legal process that must be done properly — otherwise, your business may still be liable for tax, compliance penalties, and even civil claims. Whether your company is dormant, no longer trading, or shutting down completely, understanding how deregistration works is crucial to closing your books cleanly.

In this comprehensive guide, we’ll cover:

• What company deregistration is

• The legal and financial implications of deregistering

• Reasons a company might be deregistered (voluntarily or involuntarily)

• The step-by-step process of deregistering with CIPC

• SARS-related requirements before deregistration

• How to reinstate a deregistered company

• How MMT Financial Services can help you manage the process with peace of mind

1. What Is Company Deregistration?

Company deregistration is the process of formally removing a registered company from the CIPC database, meaning it is no longer legally recognised as a company in South Africa. Once deregistered, the company ceases to exist — it can no longer trade, enter into contracts, own assets, or be sued (although directors and shareholders may still carry liabilities if the process wasn’t completed correctly).

Important: A deregistered company cannot be reopened unless it is reinstated with the CIPC — a much more complex and costly process than registration or deregistration.

2. Legal and Financial Implications

It’s essential to understand that deregistration doesn’t automatically cancel all responsibilities. In fact, failing to properly settle financial, tax, or statutory obligations before deregistration can result in:

• Outstanding tax obligations being pursued personally from directors

• Frozen bank accounts if deregistration happens while assets still exist

• Legal complications if the company is deregistered while in the middle of contracts or with unsettled liabilities

• Loss of access to company funds and properties

That’s why it’s not just about ticking boxes — the process must be done cleanly and strategically.

3. Reasons for Deregistration

There are two types of deregistration: voluntary (requested by the company) and involuntary (initiated by CIPC). Below is a breakdown of both.

A. Voluntary Deregistration

Companies can apply for deregistration if:

• The company is no longer trading

• The company has no assets or liabilities

• The decision to close the business has been approved by all directors or shareholders

B. Involuntary Deregistration

CIPC can deregister a company if:

• It fails to file annual returns for two or more consecutive years

• Its registered address is invalid or outdated

• The company has become inactive, and CIPC receives confirmation from SARS or another body

Note: Involuntary deregistration often happens without the knowledge of the directors, and can create problems later, especially with bank accounts, taxes, and legal compliance.

4. Steps to Deregister a Company Voluntarily

If you’re voluntarily deregistering, here’s the typical process:

Step 1: Ensure the Company Has No Assets or Liabilities

The company must be fully settled:

• Close all accounts

• Sell or distribute all assets

• Pay off creditors

• Cancel contracts and subscriptions

• Submit final tax returns

You cannot deregister a company that still has unresolved financial ties.

Step 2: Pass a Resolution

All directors or shareholders must agree to deregister. A written resolution is needed, stating that:

• The company has ceased trading

• It has no assets or liabilities

• The shareholders approve the deregistration

This resolution will form part of your submission to CIPC.

Step 3: Write a Formal Deregistration Request Letter

You’ll need to submit a letter to the CIPC that includes:

• Company name and registration number

• Confirmation that the company has no assets or liabilities

• Supporting documents (e.g., ID copies of directors)

• Signed resolution by all members or directors

Step 4: Submit the Request to CIPC

Email your deregistration request to the CIPC, along with supporting documents.

CIPC will review your request and either:

• Deregister the company if all requirements are met, or

• Request further documentation or clarification

Step 5: Deregistration Confirmation

Once approved, you’ll receive a confirmation letter from CIPC, officially confirming the company has been deregistered. This usually takes a few weeks.

5. SARS Requirements Before Deregistration

Before you can deregister with CIPC, you must ensure the company is in good standing with SARS. This includes:

• Submitting all outstanding tax returns

• Settling any debts or penalties

• Requesting a Tax Clearance Certificate (if required)

SARS will flag any issues that can prevent deregistration — especially if PAYE, VAT, or corporate income tax returns are missing or incorrectly filed.

MMT Financial Services can assist in reviewing your tax compliance status and communicating with SARS to ensure your deregistration is not blocked due to tax non-compliance.

6. What Happens to Bank Accounts and Assets?

Once a company is deregistered:

• All assets become property of the state

• Bank accounts are frozen or closed

• Any contracts entered into while deregistered are invalid and potentially void

This is why it’s critical to close or transfer everything before deregistration is completed. If not, the directors might need to reinstate the company just to access or manage its affairs.

7. Reinstating a Deregistered Company

If your company was deregistered by mistake or prematurely, you can apply for reinstatement. Common reasons include:

• Recovering assets held in the company’s name

• Continuing trade after an administrative deregistration

• Correcting non-compliance (e.g., annual returns or address changes)

How to Reinstate a Company

1. Submit Form CoR40.5 to CIPC

2. Provide a supporting affidavit from a director/shareholder explaining the reason

3. Include certified copies of IDs and proof of compliance

4. Settle all outstanding annual returns and penalties

Reinstatement can take several weeks to months, and may involve legal help, especially if deregistered more than five years ago.

8. How MMT Financial Services Can Help

At MMT Financial Services, we make complex processes simple. Whether you're closing a side hustle or winding down a private company, we offer:

• Voluntary deregistration support

• Tax clearance

• Final bookkeeping and payroll closure

• Legal document preparation

• Communication with CIPC on your behalf

• Reinstatement support, if required

We’ll help you deregister your company the right way — with no loose ends, no stress, and no penalties down the road.

9. Final Tips and Common Mistakes to Avoid

✅ Do:

• Keep all directors informed

• Close accounts and sell off assets before submitting

• File your last annual return

• Ensure SARS is fully up to date

❌ Don’t:

• Submit a deregistration request without checking SARS compliance

• Forget to update your registered address with CIPC

• Leave employees, creditors, or subscriptions unresolved

• Assume deregistration wipes out debts — it doesn’t

Company deregistration is not just an administrative formality — it’s a legal exit strategy. Done correctly, it can save you from future tax penalties, frozen assets, or reputational damage. Done carelessly, it can turn into a costly legal headache.

At MMT Financial Services, we ensure your company is closed with precision, compliance, and confidence. Whether you need a clean break or help correcting a messy closure, our team is here to make the process seamless.

Ready to deregister your business the right way?

📧 Email us at info@mmtfin.co.za