Why do I have to submit my company’s returns if it’s not active?

Nicole
Nicole
3 min read
May 12, 2025
Why do I have to submit my company’s returns if it’s not active?

“But I’m not even trading, why do I still have to do returns?”

If you’ve asked yourself this question, you’re not alone.

Many South African business owners are surprised to learn that even an inactive company still has legal responsibilities.

Whether your company is on pause, dormant, or never got off the ground, you’re still expected to keep up with certain filings.

Let’s break down why (and what happens if you don’t)

What counts as an ‘inactive’ company?

An inactive company (also called dormant) is one that…

  1. Isn’t trading or doing business
  2. Has no income and no significant expenses
  3. Isn’t making or receiving payments
  4. Might not even have a bank account

Even if you’ve never sent an invoice or landed a client, once your company is registered, it exists as a legal entity, and that comes with certain obligations.

What returns do dormant / inactive companies still need to submit?

1. CIPC Annual Returns

Every registered company in South Africa must submit an annual return to CIPC (even if it’s not trading)

This return confirms that your company still exists and keeps your registration active.

If you skip it, CIPC assumes your business has shut down and may deregister it.

2. SARS Tax Returns

If your company has a tax number (which it will if it’s registered), you must submit tax returns to SARS.

For a dormant company, this is usually a “nil return”.

This is a way to tell SARS that there’s no income or expenses to declare.

3. BEE Certificate (optional but recommended)

Even if you’re not trading, having a valid BEE certificate can make future tendering or partnerships easier.

And if you want to start trading again, it’s one less thing to worry about.

Why does this matter if you’re not making money?

Think of your registered company like a car in your garage.

You’re not driving it, but it still needs to be licensed and insured to stay roadworthy.

Skipping returns doesn’t mean you’re off the hook.

In fact, non-compliance can cause bigger problems down the line, like…

  1. Penalties and late fees from CIPC and SARS
  2. Deregistration of your company (even if you didn’t intend to close it)
  3. Trouble reinstating the company if you want to trade again later
  4. Red flags when applying for funding, tenders, or contracts

What happens if you just… ignore it?

You might think, “Well, I’m not using the company, who’s going to notice?”

The answer: the CIPC and SARS will notice.

These systems are automated.

So, if you don’t file your returns…

  1. The CIPC will begin deregistration after a few months of non-compliance
  2. SARS may issue penalties or flag your company as non-compliant
  3. You might struggle to open a business bank account, get funding, or apply for future opportunities

So…

It’s always better (and cheaper) to stay compliant—even if it’s just submitting a nil return.

Govchain makes it quick & easy

If you’re not trading but want to keep your company active and penalty-free, we’ll handle:

  1. Your CIPC annual return submission
  2. Your SARS nil return
  3. Any other compliance you might need (like BEE or COID)

… all done online, affordably, and without the stress.

Let us take care of the admin, so you’re covered now and ready when it’s time to trade again.

Plus: Also learn all about the appropriate CIPC Submission Fee.


Back to Blog