Why do I need an Accounting Officer and signed Annual Financial Statements if my Close Corporation is dormant and not trading
People are sometimes under the misconception that if their Close Corporation is dormant and not trading, that they do not need an accounting officer or are exempted from submitting the statutory returns for the Close Corporation.
This is far from the truth. By law, each Close Corporation needs to have a registered accounting officer and still need to comply with the local governing bodies by submitting the relevant statutory returns.
In most cases the statutory returns which need to be submitted for a dormant Close Corporation will be the following:
- Annual Duty return which needs to be submitted one month after the Close Corporations year-end with BIPA
- 2 Provisional tax returns which need to be submitted with NAMRA – one 6 months into the financial year and one on the last month of the financial year of the Close Corporation (For instance, if the Close Corporation has a December year-end, the provisional tax returns will be due in June and December)
- Income tax return which needs to be submitted with NAMRA – the income tax return is due within 7 months of the Close Corporations year end – for instance, if the year-end is December 2022, then the income tax return would be due by 31 July 2023.
The problem with not submitting these returns on time is that there are late submission penalties which are levied (even if the return is a NIL return). Therefore it is very important to ensure that these returns are submitted on time to avoid any late submission penalties.