CIPA warns procuring entities
Pauline Dikuelo | Thursday February 2, 2017 14:54
This comes after CIPA said it has realised that some deregistered companies have continued to trade noting that it is illegal and the owners of the companies might face a maximum fine of P20,000.
Speaking to Mmegi Business, CIPA Awareness and Communications Manager, Marietta Magashula urged the procuring entities to always consult the authority before awarding tenders to companies adding that procuring entities should also ask for a company’s latest annual returns.
In addition she said that they might also face the risk of contracting companies that do not have the capacity.
“We have noticed that there are some deregistered companies who continue to operate and would like to warn procuring entities to consult with us before doing business or awarding tenders to check if the company has a valid certificate,” she said.
Last year, CIPA deregistered more than 60,000 companies for failure to submit annual returns, which resulted in the authority being owed millions of pula in annual fees and penalties.
The owed funds included a P300 annual subscription fee for the 60,000 companies and a P900 penalty charged each year on every company that fails to submit annual returns.
According to Magashula, failure to comply with the annual returns is an offence according to Section 493 (2) of the Companies Act and CIPA has the ability to hand them over to the police where they might face a P20,000 fine.
“When we called them in, we have realised that most owners of these deregistered companies are ignorant as they claimed that they were not aware that their companies have been deregistered,” she said.
Magashula said that it is against this background that they have decided to engage company secretaries in a workshop, which will be held next week to sensitise them about the company governance as they are the ones who should advice management about issues, which include payment of annual returns.
She also advised the deregistered companies to come to their offices to discuss ways of paying the amount they owe adding that the payment structure is flexible as some can do it over a six months period rather then losing on the other opportunities.
According to Magashula, the purpose of the annual return is to ensure that records of the company at CIPA are kept up to date. This information includes details of shareholdings, directors and any other changes that may have occurred in the company during the year.