Voluntary deregistration is available where a company has ceased trading and has no assets and no liabilities. You apply in writing to CIPC, and once deregistered the company ceases to exist as a legal person. It does not extinguish debt, it does not close your SARS registrations, and any asset still in the company's name at deregistration can vest in the state. A company with liabilities should be liquidated, not deregistered.
The most expensive mistake here is deregistering a company that still owns something.
When you can use it
The company has ceased to carry on business, and has no assets and no liabilities.
That is the test, and both parts matter.
"No assets" is stricter than people assume. It includes the bank account balance, equipment, vehicles, stock, debtors still owed to the company, intellectual property, and any property registered in the company's name.
"No liabilities" means no liabilities at all — not "none we intend to pay". Outstanding SARS debt is a liability. So is a supplier account, a loan from a director, and an unresolved dispute.
When you must not use it
Where the company has debts. Deregistering an indebted company is not a way of escaping them, and attempting it can expose directors personally. The correct route is liquidation, which is a court or voluntary winding-up process with a liquidator, creditor claims and a proper distribution. Take legal advice.
Where the company still owns property. See below — this is the trap.
Where there is a dispute in progress, or any prospect of a claim.
The trap: assets vest in the state
When a company is deregistered, property still registered in its name can pass to the state as bona vacantia — ownerless property.
This is not theoretical. Companies get deregistered still owning a piece of land, a vehicle, or a bank balance, and recovering it means applying to have the company reinstated first — an application with requirements, cost and months of lead time — and then dealing with the asset.
Before you apply, empty the company properly:
Collect every debtor
Sell or distribute every asset to shareholders, and take advice on the tax consequences before you do — distributions to shareholders have income tax and dividends tax implications, and disposing of assets can trigger capital gains tax and recoupments
Settle every creditor
Deregister and close the bank account last, once nothing further needs to move through it
The correct sequence
Order matters. Doing this in the wrong order creates problems that are expensive to unwind.
1. Stop trading and settle the business. Collect debtors, pay creditors, dispose of assets.
2. Deal with employees. Terminations must follow the Labour Relations Act and BCEA — notice, leave paid out, certificates of service, and any severance obligations. Get this right; a deregistered company is not a defence to a CCMA referral about how the terminations were handled.
3. Bring tax up to date and settle SARS. File all outstanding returns — income tax, VAT, PAYE. Pay everything owed. A company cannot properly be deregistered with outstanding tax, and directors can be held personally liable for certain outstanding taxes.
4. Deregister your SARS registrations. VAT and PAYE deregistration are separate processes at SARS and do not happen because CIPC deregistered the company. Left open, they continue generating return obligations and penalties. See how to deregister for VAT.
Note the VAT exit charge. Deregistering for VAT triggers output VAT on assets still held on which input tax was claimed. Deal with the assets before deregistering, not after.
5. Bring CIPC up to date. Outstanding annual returns and beneficial ownership generally have to be resolved first.
6. Close the bank account.
7. Apply to CIPC in writing, signed by an authorised person, confirming the company has ceased trading and has no assets or liabilities, with the supporting documents CIPC requires.
8. Keep the records. Company records must be retained for the prescribed period, and tax records for the period SARS requires — generally five years from the date of submission of the relevant return. Deregistration does not end the retention obligation. If SARS queries a prior year, the records need to exist. See what financial records you must keep.
Voluntary vs involuntary deregistration
These are not the same thing and should not be confused.
| Voluntary | Involuntary | |
|---|---|---|
| Trigger | You apply | CIPC acts because annual returns are outstanding |
| Control | You choose the timing and prepare | It happens to you, often unnoticed |
| Preparation | Assets cleared, tax settled, records kept | Typically none — assets and liabilities still in place |
| Outcome | Clean exit | Frozen bank account, assets vesting in the state, reinstatement application |
Letting a company be deregistered by neglect is not a cheap alternative to doing it properly. It leaves loose ends — an open VAT registration accruing penalties, an asset vesting in the state, a bank balance nobody can reach.
The alternative nobody considers: keep it dormant
Deregistration is permanent. Before you do it, ask whether you actually want the company gone.
A dormant company still has obligations — annual returns, beneficial ownership, and a nil income tax return. That is a modest annual cost.
Keeping it may be worth more than that if:
The name matters. Once deregistered, the name becomes available to anyone
There is any prospect of trading again. Reinstating is harder and more expensive than maintaining
The company has a trading history you would rather not restart from zero — banks, credit providers and some tenders look at how long an entity has existed
The registration number appears in contracts or registrations that would be awkward to unwind
Deregister when you are genuinely finished, and the annual cost of maintaining a shell you will never use is the only thing keeping it alive.
Frequently asked questions
How do I deregister a company in South Africa? Apply in writing to CIPC, signed by an authorised person, confirming the company has ceased trading and has no assets or liabilities, with the supporting documents CIPC requires. Before applying, settle all creditors, collect all debtors, dispose of all assets, bring tax up to date and deregister your SARS registrations.
Does deregistering a company get rid of its debts? No. Deregistration is not a way to escape liabilities, and attempting it with debts outstanding can expose directors personally. A company with liabilities should be liquidated, which is a proper winding-up process with a liquidator and creditor claims.
What happens to assets when a company is deregistered? Property still registered in the company's name can pass to the state as ownerless property. Recovering it generally requires applying to have the company reinstated first, which takes months. Clear all assets out of the company before applying.
Does CIPC deregistration close my VAT and PAYE registrations? No. SARS registrations are deregistered separately at SARS. Left open, they continue to generate return obligations and penalties even though the company no longer exists at CIPC.
Can I deregister a company that owes SARS money? No. Outstanding tax must be filed and settled first, and directors can be held personally liable for certain outstanding taxes. Deregistration is not a route around a SARS debt.
Should I deregister or just let the company lapse? Deregister properly. Letting a company be deregistered through unfiled annual returns leaves loose ends — an open VAT registration accruing penalties, assets vesting in the state, and a bank balance nobody can access.
How long do I keep the records after deregistration? Company records must be kept for the prescribed period and tax records for the period SARS requires, generally five years from submission of the relevant return. Deregistration does not end the retention obligation.
Is it better to keep the company dormant instead? Sometimes. A dormant company costs an annual return, beneficial ownership filing and a nil tax return. That can be worth paying if the name matters, if you may trade again, or if the trading history has value.
Close it properly, or keep it properly
Both are fine. What causes damage is the third option — walking away and letting it lapse, with an open VAT registration and an asset still in the company's name.
Smartbook handles voluntary deregistration end to end: outstanding returns, SARS deregistrations, and the CIPC application in the right order.
Last reviewed: 28 July 2026. Written by the Smartbook team — SAIPA and SAICA accredited, SARS registered tax practitioners. Liquidation, director liability and the treatment of assets on deregistration are legal matters — take specialist advice where the company has liabilities or assets of substance. CIPC processes change from time to time — confirm current requirements at cipc.co.za. General guidance, not legal advice.
Primary sources: CIPC · Companies Act 71 of 2008 · SARS · Tax Administration Act 28 of 2011