Should I deregister my company if it’s dormant?

Your company’s not trading.

You're not making money from it.

So, should you just shut it down?

Before you rush to deregister, let’s take a moment to think about it.

There might be smarter ways to manage a dormant company, and it all depends on your goals.

At Govchain, we help business owners make sense of moments like this.

Whether you’re pressing pause or closing shop for good, we’ll walk you through your options with zero jargon and no pressure.

What exactly is a dormant company in South Africa?

A dormant company is a registered business that’s not actively trading.

So, your company is dormant if…

1. You’re not bringing in any income
2. You’re not paying for business-related expenses
3. You’re not entering into any new contracts or doing business deals

But even though the company’s inactive, it still legally exists, so it still has to meet basic compliance requirements.

If you ignore them, your company can be flagged or even deregistered without you knowing.

Option 1: Keep your company dormant (but compliant)

If there’s even a small chance you might want to use the company in the future, this is often your best bet.

Keeping a company dormant means you’re not actively trading, but you’re still:

1. Submitting your CIPC annual returns on time (even if you’re not making money)
2. Filing your tax returns with SARS (often as a “nil return” if there’s no income)
3. Keeping the company legally registered and in good standing

Pros of keeping a company dormant:

1. You keep your company name and registration number
2. You maintain your B-BBEE certificate, tax status, and other documents
3. You can easily “wake up” the company when you’re ready to trade again

Cons of keeping a company dormant:

1. You’ll still have small annual costs for admin and compliance
2. If you forget to file, you risk penalties or eventual deregistration

Option 2: Voluntary Deregistration

If you know for sure that you won’t use the company again, you can apply to have it deregistered.

This is a formal process through CIPC, where the company is legally removed from the Companies Register.

Once that happens, it’s officially shut down and no longer exists in the eyes of the law.

Pros of voluntary deregistration:

1. No more admin, paperwork, or annual return costs
2. No future risk of late penalties or non-compliance

Cons of voluntary deregistration:

1. You lose access to that registration number, tax history, and compliance record
2. You’ll need to start from scratch if you want to trade again in future

Very important: Before you deregister, make sure your tax affairs and CIPC returns are up to date – Govchain can help you check.

Option 3: Let the company be deregistered automatically (not recommended)

If you ignore your company’s admin for long enough, CIPC will eventually deregister it for non-compliance.

While this might sound like an easy shortcut, it can actually cause a lot of problems down the line.

Butttt here’s what can go wrong:

1. You might lose out on opportunities if your company suddenly disappears from the CIPC database
2. It can raise red flags with SARS or other stakeholders
3. If you change your mind later, reinstating the company is time-consuming—and not always possible

Automatic deregistration should be avoided though…

It’s best to rather take control of the process and decide what works best for your future.

So… should you deregister or not?

Need help figuring out what to do?

Govchain can help you to…

1. Submit your CIPC and SARS returns (even if you’re not trading)
2. Keep your dormant company compliant with minimal effort
3. Deregister your company if you're done with it – properly, legally, and stress-free

Let’s keep your business compliant, or help you close it down the right way.