Yes. A dormant company must still file a CIPC annual return, keep its beneficial ownership up to date, prepare annual financial statements, submit nil provisional tax returns twice a year, and file an ITR14. Dormancy reduces the content of those filings to almost nothing. It does not remove the obligation to make them.
This is the single most expensive misunderstanding in South African company compliance — not because any one filing is costly, but because a company left alone for three years accumulates dozens of outstanding returns, each carrying its own penalty, and ends up deregistered with its assets forfeited to the state.
TL;DR
A dormant company must still:
| Obligation | Frequency | Consequence of skipping |
|---|---|---|
| CIPC annual return | Annually, on the registration anniversary | Penalties, then deregistration |
| Beneficial ownership | Annually with the return | Annual return blocked entirely |
| Annual financial statements | Within 6 months of year end | Companies Act non-compliance |
| IRP6 provisional returns | Twice a year, nil | Administrative penalties |
| ITR14 | 12 months after year end | Administrative penalties, non-compliant status |
| EMP201 (if still registered as employer) | Monthly, nil | Penalties |
| VAT201 (if still VAT registered) | Per tax period, nil | 10% penalty and interest |
Realistic cost to keep a dormant company alive: R2,000 to R6,000 a year. If you will not use it, deregistering is cheaper.
What "dormant" actually means
There is no single definition that applies everywhere, and that causes confusion.
For CIPC, a company is either registered or it is not. Dormancy changes nothing about the filing obligation, though it does affect the fee — the annual return fee is calculated on turnover, so a company with nil turnover pays the lowest band.
For SARS, dormancy is a status you indicate on the ITR14, which removes most sections of the return. It does not remove the requirement to submit it.
For accounting purposes, dormant broadly means no significant accounting transactions during the period. Note that bank charges are transactions — a "dormant" company with an open bank account paying R60 a month in fees is technically transacting.
The practical test: if the company still exists on the CIPC register, it has obligations, regardless of what it did or did not do.
The obligations in detail
CIPC annual return
Due within 30 business days after the anniversary of the company's registration date. Close corporations file from the first day of their anniversary month.
Fees are calculated on turnover, so a dormant company with nil turnover falls in the lowest band. Late filing attracts a higher fee, and continued non-filing leads to referral for deregistration.
Beneficial ownership
Filed with the annual return, and within 10 business days of any change.
This one has teeth. CIPC blocks the annual return entirely if beneficial ownership is not up to date. It is not a separate obligation you can defer — it is a precondition for filing at all.
Annual financial statements
Every company prepares AFS within six months of financial year end, dormant or not. For a dormant company they are short: a nil income statement, a minimal balance sheet, and the notes.
Companies that do not submit AFS with the annual return complete the Financial Accountability Supplement instead.
Provisional tax
Every company is a provisional taxpayer, automatically. That means two IRP6 returns a year, declaring nil.
Not submitting leaves each period outstanding and attracts administrative penalties.
ITR14
Due 12 months after financial year end. Indicate dormancy in the opening questions and most sections fall away — but the return must be submitted.
PAYE and VAT, if still registered
If the company is still registered as an employer, it files a nil EMP201 every month. If it is still VAT registered, it files a nil VAT201 every tax period.
If a company is genuinely dormant, deregister these tax types. Twelve nil EMP201s a year for a company with no employees is pure administrative burden with penalty exposure attached. Note that VAT deregistration triggers exit VAT on any assets still held.
What it costs to keep a dormant company alive
| Item | Typical annual cost |
|---|---|
| CIPC annual return fee (nil turnover band) | R100 – R150 |
| Beneficial ownership filing | Included or small fee |
| Annual financial statements | R1,500 – R4,000 |
| Two IRP6 returns and one ITR14 | R500 – R2,000 |
| Total | R2,000 – R6,000 a year |
Plus your time, and the standing risk that a missed filing quietly makes you non-compliant with SARS — which blocks tax clearance for every entity where you are the registered representative, not just the dormant one.
What happens if you just stop
This is the path most dormant companies actually take, and it ends badly.
Year 1. Annual return missed. Company flagged non-compliant at CIPC. Outstanding SARS returns accumulate administrative penalties monthly.
Year 2. Penalties compound across each outstanding return. CIPC begins the deregistration process on the assumption the company is inactive.
Year 3. Company referred for deregistration, then finally deregistered.
On final deregistration:
The company ceases to exist as a legal entity
Assets still in its name are forfeited to the state as bona vacantia — this includes bank balances, vehicles and property
Contracts in its name fall away
Bank accounts are frozen
Reinstating it requires a CoR40.5 application, all outstanding returns brought up to date, and typically three weeks to several months
The forfeiture point is the one people do not see coming. A company that owned a property or held R400,000 in a bank account does not simply go quiet — that value goes to the state until the company is restored.
Deregistering: usually the right answer
If you will not use the company within the next 12 months, deregistering voluntarily is cheaper, cleaner and safer than maintaining it.
Before you can deregister:
All outstanding CIPC returns must be filed
SARS tax types should be deregistered and outstanding returns submitted
Creditors must be dealt with
Assets must be moved out of the company before deregistration, not after
The company must have no outstanding liabilities
The realistic timeline is around six months. It is not fast, but it is finite — unlike maintaining a company you will never use.
Do not deregister if: the company holds assets you have not moved out, there are unresolved liabilities, it is party to a contract or lease, it holds a licence or registration worth keeping, or you might genuinely trade through it within a year or two.
When keeping it dormant is the right call
There are legitimate reasons to hold a company inactive:
You are between ventures and expect to trade through it again within a year or two. Reactivating a compliant dormant company is far easier than registering a new one and rebuilding its history.
It holds an asset or registration you want to keep — a lease, a licence, intellectual property, a CIDB grading, a trading history that matters for tenders.
The name matters and you want to protect it.
There is history worth preserving — a company with five years of compliant filings and a clean SARS record is worth more than a new registration when you next apply for finance or bid for work.
If you keep it, keep it properly compliant. A dormant company costs R2,000 to R6,000 a year to maintain and is worth something. A dormant company that stopped filing three years ago is a liability with penalties attached.
Frequently asked questions
Does a dormant company need to file CIPC annual returns? Yes. The obligation follows registration, not activity. The annual return is due within 30 business days of the company's registration anniversary, and the fee is calculated on turnover so a nil-turnover company pays the lowest band.
Does a dormant company need to submit tax returns to SARS? Yes. Every company is a provisional taxpayer, so two nil IRP6 returns are due each year, plus an ITR14 twelve months after financial year end. Dormancy is indicated on the ITR14 and removes most sections, but the return must still be submitted.
Does a dormant company need annual financial statements? Yes. Every company must prepare annual financial statements within six months of its financial year end. For a dormant company they are short, but the obligation exists.
What happens if I stop filing for a dormant company? Penalties accumulate on each outstanding return, the company is flagged non-compliant at CIPC, and it is eventually referred for deregistration. On final deregistration the company ceases to exist and any assets still in its name are forfeited to the state.
How much does it cost to keep a dormant company compliant? Typically R2,000 to R6,000 a year, covering the CIPC annual return fee, annual financial statements, two provisional tax returns and the ITR14.
Should I deregister my dormant company? If you will not use it within the next 12 months and it holds no assets, licences or contracts worth keeping, deregistering is usually cheaper and safer than maintaining it. Move any assets out before deregistering, not after.
Do I still need to file EMP201 and VAT201 for a dormant company? If the company remains registered for those tax types, yes — nil returns for every period. If it is genuinely dormant, deregister the tax types instead. Note that VAT deregistration triggers exit VAT on any assets still held.
Can a deregistered company be restored? Yes, through a reinstatement application to CIPC, which requires all outstanding returns to be brought up to date. It typically takes three weeks to several months, and it is considerably more expensive than simply having filed.
Cheap to keep, expensive to abandon
The pattern we see repeatedly: a company stops trading, the owner stops filing, and three years later a tax clearance application for an entirely different business fails because the same person is the registered representative on a non-compliant entity.
Smartbook keeps dormant companies compliant for a fraction of a trading company's cost — or handles the deregistration properly if the company has genuinely run its course.
Last reviewed: 26 July 2026. Written by the Smartbook team — SAIPA and SAICA accredited, SARS registered tax practitioners. Cost ranges are typical market observations, not quotes. Confirm current CIPC fees before relying on them. General guidance, not advice on your circumstances.
Primary sources: CIPC — Annual Returns · CIPC — Beneficial Ownership · SARS — Companies · Companies Act 71 of 2008