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How to close a company in South Africa: deregistration, liquidation or business rescue

Which route you use depends on what the company owns and owes. A dormant company with no assets and no debts is deregistered through CIPC. A solvent company with assets to distribute is wound up voluntarily under section 80 of the Companies Act. An insolvent company goes into a creditors' voluntary winding-up overseen by the Master of the High Court. A company that is struggling but can still be saved may use business rescue under Chapter 6.

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Key facts

Dormant, no assets or debts
CIPC voluntary deregistration, s 82(3) Companies Act 2008
Solvent, assets to distribute
Special resolution filed on CoR40.1 (s 80), with JM12 security or the Master's consent
Insolvent
Creditors' voluntary winding-up: CM26 resolution plus CM100 statement of affairs (CIPC Notice 35 of 2024)
Distressed but rescuable
Business rescue: board resolution on CoR123.1, practitioner appointed within 5 business days (s 129)

Deregistration through CIPC

Fits: the company has stopped trading and has no assets and no liabilities, or so few assets that liquidation is pointless. Who decides: the directors or members, with at least half of the active directors or members confirming online. Which body: CIPC only. There is no liquidator and the Master is not involved.

Steps: settle every debt, close the bank account, update director details, apply on BizPortal or e-Services, then wait about two months for objections before final deregistration. Then close each SARS tax type separately. Duration drivers: objections, wrong contact details, and SARS clearing outstanding returns. Risk to directors: if debts were left unpaid, directors can be held personally liable and the company can later be reinstated.

Solvent voluntary winding-up (members' or shareholders' liquidation)

Fits: the company can pay all its debts and has assets to realise and distribute, such as property or cash. Who decides: the shareholders, by special resolution, which must say whether the winding-up is by the company or by its creditors. Which bodies: CIPC registers the CoR40.1; the Master of the High Court deals with security and the liquidator.

If the winding-up is by the company, before filing you must either lodge security with the Master for payment of debts within 12 months (a JM12), or get the Master's consent to dispense with security. The Master usually wants a director's sworn statement that the company has no debts and a certificate from the auditor, or someone qualified to be appointed as auditor, confirming that it appears to have none. CIPC's service standard for the CoR40.1 is three working days. Once filed, the company must stop business except what is needed to wind up, and it is dissolved when its name is removed from the register. Duration drivers: the Master's office, selling assets and final tax returns.

Creditors' voluntary winding-up (insolvent company)

Fits: liabilities exceed assets, or the company cannot pay its debts as they fall due. Insolvent winding-ups still run under the old Companies Act 1973 rules. Who decides: the shareholders pass a special resolution for a creditors' voluntary winding-up; for a CC, the members resolve under the Close Corporations Act. Which bodies: CIPC registers the resolution (CM26), then the Master of the High Court appoints a liquidator and creditors' meetings follow.

The resolution must be filed with a CM100 statement of affairs, sworn before an independent commissioner of oaths. CIPC Notice 35 of 2024 lists strict rules: every page completed, the figures must balance, and Lists A to D completed. Applications that miss any rule are rejected, and if the statement does not show insolvency CIPC expects a CoR40.1 instead. Once registered, the directors lose their powers to the liquidator. Duration drivers: rejected filings, the Master's office, creditor claims and asset sales. Risk to directors: the liquidator can investigate trading before the liquidation, and directors who traded recklessly or fraudulently can be held personally liable.

Business rescue (Chapter 6)

Fits: the company is financially distressed, meaning it is reasonably unlikely to pay its debts over the next six months or is likely to become insolvent within six months, but there is a reasonable prospect of saving it or getting a better result for creditors than a liquidation. Who decides: the board, by resolution, or a court on application by an affected person such as a creditor, shareholder, employee or union. The board cannot adopt the resolution once liquidation proceedings have started.

Which bodies: CIPC receives the resolution on a CoR123.1 and the practitioner's appointment on a CoR123.2; the practitioner must be licensed by CIPC. Within five business days of filing, the company must notify every affected person and appoint the practitioner, or the resolution lapses. The practitioner takes over management and must publish a rescue plan within 25 business days of appointment, which creditors vote on. If proceedings run past three months, the practitioner must report progress monthly. Risk to directors: they stay in office under the practitioner's authority, and if the board believes the company is distressed but does not start business rescue, it must give affected persons written notice of its reasons (s 129(7)).

Which one fits you?

Start with the latest balance sheet and the SARS statement of account, then answer these questions in order.

  • Is the business viable if creditors give it time or accept a plan? Look at business rescue.
  • Does the company owe more than it owns, or can it not pay its bills as they fall due? Creditors' voluntary winding-up.
  • Does the company still own assets (cash, property, vehicles, a loan account owed to it) and can it pay everyone? Solvent winding-up under section 80.
  • Has it stopped trading, with no assets and no debts at all, including SARS? CIPC voluntary deregistration.
  • Are annual returns outstanding? Bring them up to date first: CIPC may refuse other filings, and a company already finally deregistered must be reinstated before it can be liquidated.

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Frequently asked questions

What is the difference between liquidation and deregistration?

Deregistration simply removes an empty company from the CIPC register. Liquidation appoints a liquidator through the Master of the High Court to sell assets and pay creditors before the company is dissolved.

Can I deregister a company instead of liquidating it to save time?

Only if it truly has no assets and no debts. Deregistering a company with debts can leave directors personally liable, and creditors can have the company reinstated.

Who appoints the liquidator in a voluntary liquidation?

The Master of the High Court appoints the liquidator after CIPC registers the winding-up resolution.

Can a company in liquidation go into business rescue?

The board cannot resolve to start business rescue once liquidation proceedings have begun. An affected person can still apply to court, which may suspend the liquidation.

Do I need to deregister with SARS if the company is liquidated?

Yes. Tax returns and tax types stay on record until SARS deregisters them, so the liquidator or directors must deal with SARS as part of closing the company.

Official sources

This guide explains the general rules. Requirements and portal steps change, so check the official source before you file.