1. Closing a business
In order to ensure a smooth closing down process, the following needs to be considered:
- Involve your Accountant
- Preparation of Financial Statements
- The business has no assets, and because it has no assets, then there is no reasonable probability that the of the business being liquidated
- The business has ceased to operate
- Start the deregistration process with SARS (South African Revenue Service)
- Start the deregistration process with CIPC (Companies and Intellectual Property Commission)
- Start the deregistration process with UIF (Unemployment Insurance Fund)
- Start the deregistration process with CF (Compensation Fund)
2. What is de-registration of a business?
When a business stops operating and removes itself from CIPC by formally deregistering the business. This means that the business will no longer be formally registered. The business will therefore not have any assets or liabilities and will not be operating anymore.
3. What is liquidation?
When a business is unable to pay its liabilities to it creditors. The Directors of the company may begin this process or sometimes the creditors can also initiate the process. Voluntary liquidation means that the Directors realise that they owe more than what their combined business assets are and engage with a liquidator. Other reasons for liquidation can be a court order or the business owner wanting to retire or wants to do something else.
The process of liquidation is selling up all the assets, paying the creditors and if there is any left over assets then it is issued to the parent company or to the business owner.