False “Yes” on Your CIPC Checklist? That’s a Legal Risk

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The CIPC has issued a stern reminder to companies: the Compliance Checklist is a legal declaration. And submitting false or misleading information could land you in hot water under Section 215 of the Companies Act.

The Compliance Checklist

Implemented in 2020, the Compliance Checklist is designed to promote accountability, transparency, and sound corporate governance. It is a mandatory annual online declaration for South African companies (Private, Public, State-Owned, Non-Profit) confirming adherence to key sections of the Companies Act, covering financial solvency, record-keeping, shareholder rights, director appointments, and financial assistance rules. It contains targeted questions requiring directors or company officers to declare whether the company complied with various provisions of the Companies Act, by answering “Yes,” “No,” or “Not Applicable,” with supporting comments.

Common Problems Noted

But recent reviews by the CIPC have revealed a troubling pattern of inaccurate submissions. Some of the most common issues include:

🔹 Late Annual Returns

Companies declare compliance with Section 33 (filing returns within 30 business days of their anniversary date), yet CIPC records show these returns were filed well after the legal deadline.

🔹 Incorrect Director Removal Claims

Some companies indicated compliance with Section 71 (relating to removal of directors) despite no such events being recorded for the company during the compliance period.

🔹 Misuse of Schedule 1 Provisions

Private companies and state-owned entities selected “Yes” to questions related to provisions that only apply to non-profit companies.

These missteps, whether due to carelessness or misinterpretation—undermine the integrity of the compliance process and may lead to investigations under Section 168(2), which allows CIPC to initiate action without a formal complaint.

What This Means for You

Directors, company secretaries, and anyone responsible for filing must ensure responses are accurate and supported by evidence. Submitting incorrect information is not only unethical, it’s illegal.

Read more details in CIPC Customer Notice 53 of 2025.