CIPC & SARS Compliance

How to Close a Business in South Africa

Don't just walk away. Learn the correct process to deregister your company and avoid penalties from SARS and CIPC.

Why you can't just "leave it"

In the past, you could just leave a company to be deregistered automatically. Things have changed.

Since 2019, SARS and CIPC have tightened the rules. If you ignore a dormant company, you risk:

  • Monthly Administrative Penalties from SARS.
  • Threats of legal action.
  • Difficulty opening new businesses in the future.
Need Help Deregistering? Contact Us

The Process for Dormant Companies

Use this process if the company never traded or has been inactive for a long time.

Step 1: The Affidavit

You must draft a sworn affidavit stating the company never traded (or ceased trading), has no assets/liabilities, and you wish to deregister it.

Step 2: File Returns (Zero)

You must file all outstanding tax returns at SARS. Since it was dormant, these will be "Zero Returns".

Step 3: Tax Clearance

Once returns are up to date, apply for a Tax Compliance Status (TCS) Pin / Tax Clearance Certificate.

Step 4: CIPC Deregistration

Send your Tax Clearance + Affidavit to CIPC. Wait approx. 6 months for the final Deregistration Certificate.

Step 5: Final SARS Appointment

Crucial Step: Once you have the CIPC certificate, you MUST make an appointment with SARS (Virtual or Branch) to deregister the Income Tax Number. It does not happen automatically!

The Process for Trading Companies

Use this process if the company has been active recently.

Pre-Closure Checklist

Before you file anything, you must "clean" the company:

  • Sell all assets: Convert equipment/stock to cash or transfer them out legally.
  • Pay all liabilities: Settle all creditors and loans.
  • Close the Bank Account: This is proof that trading has ceased.
  • Zero Balance Sheet: The company must have R0 Assets and R0 Liabilities.

Once the company is clean:

  • File all Income Tax returns (with final financial statements).
  • Submit EMP123 to deregister PAYE/UIF with SARS.
  • Submit VAT123 to deregister VAT with SARS.
  • Deregister with Dept of Labour (uFiling) - Separate from SARS!
  • Deregister with COIDA (Compensation Fund).
  • Apply for Tax Clearance & Deregister at CIPC.
  • Final Step: Make a SARS appointment to deregister the Tax Number.

Warning: If your Liabilities > Assets (you owe more than you have), you cannot just close.

You legally need to Liquidate. This involves lawyers, liquidators, and the High Court. This is a specialized legal process.